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Open skies over the Middle East, Volume 1
Author:Cristea, Anca; Hillberry, Russell; Mattoo, Aaditya; Country:Middle East and North Africa;
Date Stored:2014/06/24Document Date:2014/06/01
Document Type:Policy Research Working PaperSubTopics:Public Sector Corruption & Anticorruption Measures; Transport Economics Policy & Planning; Air Quality & Clean Air; Roads & Highways; Airports and Air Services
Language:EnglishMajor Sector:Industry and trade
Rel. Proj ID:1W-Services Trade Research -- -- P110919;Region:Middle East and North Africa
Report Number:WPS6937Sub Sectors:Other domestic and international trade
Collection Title:Policy Research working paper ; no. WPS 6937TF No/Name:TF013965-Services Trade and Policy Reform; TF012605-Dissemination of the Services Trade Restrictions Database
Volume No:1  

Summary: The dynamism of air traffic markets in the Middle East obscures the persistence of restrictions on international competition. But how important are such restrictions for passenger traffic? This paper uses detailed data on worldwide passenger aviation to estimate the effect of air transport policy on international air traffic. The policy variable is a quantitative measure of the commitments under international agreements. The paper analyzes, for the first time, not only bilateral agreements, but also plurilateral agreements such as the one between Arab states. The analysis finds that more liberal policy is associated with greater passenger traffic between countries. Higher traffic levels appear to be driven primarily by larger numbers of city pairs being served, rather than by more passengers traveling along given routes. To demonstrate the quantitative implication of the estimates, two liberalization scenarios in the Middle East are evaluated. Deepening the plurilateral agreement among Arab states would lead to a 30 percent increase in intraregional passenger traffic. Widening the agreement to include Turkey would generate significantly larger gains because current policy vis-à-vis Turkey is much more restrictive.

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