The evolution of global airlines : the role of airline mergers, franchises and alliances in the re-development of international air transport regulation

Air transport is by its very nature one of the most international of economic activities. However, until fairly recently, its regulatory framework has been premised on an overriding nationalism developed and maintained on the basis of the following: substantial ownership and effective control provisions found in national legislation and most bilateral air transport agreements; restrictions on cabotage found in national legislation, most bilateral air transport agreements and Article 7 of the Chicago Convention; and the related national restrictions on the right of establishment applicable to national carriers.However, as the international component of the air transport industry has grown in importance, the tenets underlying this restrictive regulatory system are increasingly coming into question. This thesis examines the development of international airline co-operation and integration, namely by way of mergers, franchises and alliances, in the face of the existing regulatory obstacles. It examines the legal impediments to, the form of, and the costs and benefits of each of these integrative methods and their various derivatives. Finally, it traces the regulatory responses to these integrative activities, and explores the possibility and methodology of creating a truly global airline, both in form and in function