Open Skies Agreements Lead to Airfare Savings
June 1, 2015
Since the late 1970s, the United States has entered into open skies agreements (OSAs) with more than 100 countries and partners around the world. The ultimate aim of these agreements is to grow travel, trade and jobs by allowing airlines to thrive in the free market.
OSAs prevent governments from interfering with airlines' decisions about routes, airfare, airline capacities, and more. By doing so, OSAs stimulate competition and create more efficient, affordable air services for passengers in the U.S. and around the globe.
At least, that is the theory proponents of OSAs have been articulating for decades. But do we have any evidence to back it up?
- OSAs have lowered airfare 15 percent and increased international flight operations for consumers.
- OSA routes operated more flights even though they served fewer passengers, with the difference in flight frequency peaking at close to 10 percent in 2007 and 2008.
- Airfare reduction equaled $4 billion in annual savings to consumers.
Travelers could reap another $4 billion annually if the United States were to negotiate OSAs with other countries that have a significant amount of U.S. international passenger traffic.
Source: Delaney Parrish, "You're Saving 15 Percent on Airfare Thanks to Open Skies Agreements, But You Could Be Saving More," Brookings, May 28, 2015.
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