Assessing the impact of open skies agreements

This chapter outlines the individual country open skies agreements between the USA and other countries as well as the EU-US Open Skies Agreement signed in 2007, which came into force in 2008. Evidence is provided on the impact of both the individual agreements as well as the EU-US Agreement by using time series analysis with intervention terms to estimate the impact on passenger numbers. The empirical focus is on British Airways (BA) and its Open Skies off shoot airline serving New York from Paris Orly. Comments are also made on the recently discontinued service from Amsterdam (AMS) as well as the impact on slots at airports, including London Heathrow, and on airline start ups given the change in ownership regulations, for example the case of Virgin America. The data requirements of a more widespread assessment looking at costs and pricing is reviewed, following the reports of the Brattle Group and Booz Allen Hamilton, as well as the difficulties of dealing with the counterfactual, if such data became available.