The New Institutions of Transatlantic Aviation

IBEI Working Papers 2010/32

20 Pages Posted: 18 Nov 2010

See all articles by Yannis Karagiannis

Yannis Karagiannis

Institut Barcelona d'Estudis Internacionals - IBEI

Adrienne Heritier

Max Planck Institute for Research on Collective Goods; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Date Written: November 1, 2010

Abstract

This article focuses on the institutions of transatlantic aviation since 1945, and aims at extracting from this historical process topical policy implications. Using the methodology of an analytic narrative, we describe and explain the creation of the international cartel institutions in the 1940s, their operation throughout the 1950s and 60s, their increasing vulnerability in the 1970s, and then the progressive liberalization of the whole system. Our analytic narrative has a natural end, marked by the signing of an Open Skies Agreement between the US and the EU in 2007. We place particular explanatory power on (a) the progressive liberalization of the US domestic market, and (b) the active role of the European Commission in Europe. More specifically, we explain these developments using two frameworks. First, a “political limit pricing” model, which seemed promising, then failed, and then seemed promising again because it failed. Second, a strategic bargaining model inspired by Susanne Schmidt’s analysis of how the European Commission uses the threat of infringement proceedings to force member governments into line and obtain the sole negotiating power in transatlantic aviation.

Keywords: Trade Liberalization, Transatlantic Agreements, Aviation, Open Skies, European Politics

Suggested Citation

Karagiannis, Yannis and Heritier, Adrienne, The New Institutions of Transatlantic Aviation (November 1, 2010). IBEI Working Papers 2010/32, Available at SSRN: https://ssrn.com/abstract=1710504 or http://dx.doi.org/10.2139/ssrn.1710504

Yannis Karagiannis (Contact Author)

Institut Barcelona d'Estudis Internacionals - IBEI ( email )

Ramon Trias Fargas 25-27
Barcelona, Barcelona 08005
Spain

Adrienne Heritier

Max Planck Institute for Research on Collective Goods ( email )

Poppelsdorfer Allee 45
Common Goods: Law, Politics and Economics
D-53115 Bonn
Germany
+049(0)228 914160 (Phone)
+049(0)228 9141655 (Fax)

HOME PAGE: http://www.mpp-rdg.mpg.de/herit.html

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

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50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

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