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

Bin Mohamed Anuar, Muhammad Danish Danial, Itani, Nadine, O'Connell, John F. and Warnock-Smith, David (2025) Investigating the impacts of ASEAN-EU comprehensive air transport agreement on the carriers’ competitive dynamics. Journal of Air Transport Management, 124. p. 102739. ISSN 09696997

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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.

Item Type:	Article
Additional Information:	** Article version: AM ** Embargo end date: 05-01-2027 ** From Elsevier via Jisc Publications Router ** History: accepted 01-01-2025; epub 05-01-2025; issued 30-04-2025. ** Licence for AM version of this article starting on 05-01-2027: http://creativecommons.org/licenses/by-nc-nd/4.0/
SWORD Depositor:	JISC Router
Depositing User:	JISC Router
Date Deposited:	26 Feb 2025 14:35
Last Modified:	26 Feb 2025 14:35
URI:	https://bnu.repository.guildhe.ac.uk/id/eprint/19544

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