At the Core of Airline Foreign Investment Restrictions: A Study of 121 Countries

Abstract

There is a growing discrepancy between the success of economic liberalisation in international air services and the remaining limits to trans-border airline investment, especially the constraints embedded in national airline establishment regimes. The aim of the article is to deliver practical information on these limitations worldwide, along with careful annotations. The article portrays the worldwide scale and extent of the discussed restrictions by presenting national regulations on airline ownership and control in 121 states and territories. Normative characteristics of the airline nationality requirements are discussed based on the above material, key rulings and literature. This includes an analysis of legal construction of the limitations, their sources and addressees, relations of the ownership and control tests and the role of discretionary regulatory policy. The study shows that airline investment rules worldwide generally remain restrictive, and that the potential for reform is outside the ownership and control-based system rather than within it.

Keywords: airline business, investment restrictions, foreign investment, airline privatization, airline ownership and control, airline ownership, airline nationality, airline liberalization, airline establishment, Investment Law, Foreign Direct Investment, Civil Aviation, Aviation management, Aviation Law

JEL Classification: K22, K23, K33