Investigating the impacts of ASEAN-EU comprehensive air transport agreement on the carriers’ competitive dynamics

IF 3.9 2区工程技术 Q2 TRANSPORTATION

Journal of Air Transport Management Pub Date : 2025-01-05 DOI:10.1016/j.jairtraman.2025.102739

Muhammad Danish Danial Bin Mohamed Anuar , Nadine Itani , John F. O'Connell , David Warnock-Smith

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Abstract

The Association of Southeast Asian Nations (ASEAN) and the European Union (EU) signed the Comprehensive Air Transport Agreement (CATA) between their member states in October 2022.

The ASEAN-EU CATA is the world's first bloc-to-bloc air transport agreement and reflects the latest policy thinking in air transport regulation. The agreement allows the carriers of the two blocs to operate passenger and cargo services between and beyond both regions, by exercising Fifth Freedom traffic rights and liberalising codeshare restrictions.

Since 2014 and despite both sides showing a commitment to elevating their aviation relations to a new level, the two regions remain different regarding the level of domestic air travel market integration and liberalisation. These intrinsic variations contribute to creating disadvantages in the competitive position of ASEAN-based carriers when compared to their EU counterparts.

This study aims to investigate the possible implications of the CATA on the competitive dynamics of airlines in both markets, by applying the Competitive Dynamics Model to analyse the interactions in the strategies and responses, and its implications on the performance of the relevant air carriers. Using secondary data, a series of quantitative indicators are utilised to examine selected ASEAN and EU carriers' awareness, motivation, and ability to respond to the novel changes in the industry's regulatory and competitive environment.

While the findings indicate the strategic responses of both ASEAN and EU carriers is more focussed on interline agreements and joint ventures, competitive rivalry is to remain intense for popular destinations such as those to and from Thailand and Singapore.

The study analyses the advantages in the scheduled frequencies and fares of the big three Middle Eastern carriers and Turkish Airlines, over home airlines in major ASEAN and EU hubs. The CATA-induced partially liberalised market will drive more partnerships among ASEAN and EU carriers to align schedules in their respective hubs as a response to competition posed by Middle Eastern carriers. The findings suggest that the possible actions and reactions of airlines to one another are precursors to driving changes in market structure over time within the new ASEAN-EU CATA framework.

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来源期刊

Journal of Air Transport Management TRANSPORTATION-

CiteScore

12.40

自引率

11.70%

发文量

期刊介绍： The Journal of Air Transport Management (JATM) sets out to address, through high quality research articles and authoritative commentary, the major economic, management and policy issues facing the air transport industry today. It offers practitioners and academics an international and dynamic forum for analysis and discussion of these issues, linking research and practice and stimulating interaction between the two. The refereed papers in the journal cover all the major sectors of the industry (airlines, airports, air traffic management) as well as related areas such as tourism management and logistics. Papers are blind reviewed, normally by two referees, chosen for their specialist knowledge. The journal provides independent, original and rigorous analysis in the areas of: • Policy, regulation and law • Strategy • Operations • Marketing • Economics and finance • Sustainability