Historic agreement frees up air capacity between the EU and ASEAN

It's a landmark agreement: the 17 October was officially signed onOpen skies agreement between the EU and ASEAN (Association of South-East Asian Nations*). While this is not the first agreement of its kind with the EU, it is historic in one respect. It is the first time that two economic blocs have agreed on such an open skies treaty.

According to the European Commission, the global agreement opens up more opportunities and improves the direct connectivity between the two regions. It also modernises the rules and standards applicable to the flights concerned. It sets general standards that commit the 37 countries of the two regions to fair competition.. It aims to improve social and environmental conditions. This agreement is the most recent example of a new generation of international air transport agreements. Its signature opens up new opportunities for consumers, airlines and airports in both Europe and ASEAN.

The Commissioner for Transport, Adina Văleanhe said: "This first ever "block to block" air transport agreement takes the EU-ASEAN aviation partnership to a new level. It will support the recovery of the aviation sector from COVID-19 and re-establish much-needed connectivity that will benefit some 1.1 billion people. This will boost economic activity, trade, tourism and commerce. The agreement therefore provides a new platform for working together towards a shared commitment to economically, socially and environmentally sustainable air transport. ".

The EU and ASEAN are also hoping to halt the rise of the Gulf carriers and Turkish Airlines.

Better connectivity and a level playing field

ASEAN is a global economic powerhouse with a rapidly growing aviation market. In 2019, it will account for 9^e largest freight market in the European Union and the 16^e for passengers. Or 8 million passengers a year.

In concrete terms, what changes does the new bilateral agreement bring?

• It replaces more than 140 bilateral air agreements by a single set of rules and reduced administrative formalities. EU Member States that had no bilateral agreement with the ASEAN States are also covered by the new legal framework.
• All EU/ASEAN airlines will be able to operate direct flights from any EU and ASEAN airport.. EU and ASEAN air carriers will thus be able to compete with airlines vying for the lucrative EU-ASEAN market.
• Airlines will be able to operate up to 14 weekly passenger services to and from each EU or ASEAN Member State.. This includes traffic rights to any third country ("fifth freedom").
• The agreement includes modern and fair competition provisions to remedy market distortions.

At the moment, Singapore Airlines and its subsidiary Scoot, Thai Airways International, Vietnam Airlines and, recently, Bamboo Airways (Vietnam) serve the EU. Garuda Indonesia, on the other hand, is due to suspend services to Amsterdam in the near future.

EU side, Air France, Air Austral, Austrian Airlines, Finnair, KLM, LOT, Lufthansa and SAS Scandinavian Airlines offer flights to an ASEAN country..

* ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.