Wednesday, September 22, 2010

Aviation Ground Handling Market and GATS

Aviation's circumscribed position within the General Agreement on Trade in Services has received scant discussion in the secondary literature over the past several years.  A new working paper discussing GATS and ground handling services may help to rectify this lacunae.  See Sumangal Narendra, Aviation Ground Handling Market and GATS (Working Paper Sept. 16, 2010) (available here).  From the abstract:

This paper aims at exploring the prospects of opening the Aviation Ground Handling Market vis-à-vis the GATS provision. The study is focused on the developments in terms of review and open market access to aviation ground handling services and in the GATS Air Transport Review. Air transport auxiliary services are emerging as important services, especially the Ground Handling Services. Expenditure on Ground handling services forms a substantial part of the operating expense of the airlines. As a response to the changes in the aviation environment, many policy changes and new initiative have been made by the governments. The study focuses on the constraints and implications of further liberalization of these services to boost competitiveness and facilitate efficient movement of goods and passengers. The study revealed that the gradual liberalization of Ground Handling market in India though widely criticized for its slow pace by the airlines, the major user of the services, has been successful so far, considering the response from the stakeholders, especially the regulatory bodies, is concerned. While naturally the airlines but not so much the national carrier, are clamouring for the full liberalization of the market with self-handling rights, the airport operators are concerned about the loss of business, monopoly status, and space constraints. Another dimension to liberalization is the safety and security concerns of the State where the regulators have been advising cautious approach to ensure the safety and security. This paper is divided into four sections: Section 1 giving the GATS and the position of Air transport, specifically the Ground Handling services, Section 2- traces the regulatory developments in the Air Transport with specific reference to Ground Handling market, as also addresses the implications for liberalization of these services through existing bilateral, to increasing pluri-lateral /multi-lateral and regional agreements. Section 3 discusses the Regulatory concerns vis-à-vis suggested course of liberalization. Conclusions are based on the findings. Section 4 enumerates the recommendations regarding areas for further research in.

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