The State and Liberalization: The Airline Industry in the East Asian NICs

Abstract

This study of airline liberalization in South Korea, Taiwan, Hong Kong, the Philippines, Thailand, Malaysia, Singapore, and Indonesia examines the evolving relationships between states and carriers. The airline industry of East Asia has been an arena for significant liberalization initiatives in the last decade. State‐owned carriers have been privatized; new carriers have been allowed to enter domestic and international markets; and government controls over such dimensions of airline competition as equipment choice, fares, and route selection have been eased. Yet, the state remains deeply engaged in the airline industry. Indeed, the most striking feature of airline liberalization in the region is its incompleteness. States have, for example, stopped short of relinquishing ultimate control of flag carriers to the private sector. The liberalization process has been influenced by a variety of factors. Among these are the size and growth of markets, the need to improve the competitiveness of state‐owned carriers, the political environment, and the relationship of the airline industry to economic development. For the capitalist developmental states in these newly industrializing countries (NICs), the airline industry's contribution to economic development is of paramount importance. Given the importance of this industry, the region's governments have sought to balance the risks and benefits of liberalization via policies that are selective, incremental, pragmatic, and deliberative.

Exploring causality in trade and air passenger travel relationships: the case of Asia-Pacific, 1980–2010

“…Table 1 suggests that the enormous trade flows to and from Singapore have been translated into air passenger connections. This could be related to Singapore's early adoption of very liberal approaches towards international air travel connections (Bowen and Leinbach, 1996), which has allowed the quick translation of demand into supply. A similar interpretation can be made for the Malaysian case.…”

Business connectivity, air transport and the urban hierarchy: A case study in East Asia

“…This area has been selected as it incorporates most of the nations that have been analyzed in studies of Asian economic development, which is best seen in the study of East Asian Miracle (The World Bank, 1993) and the debates surrounding the work of Wade (1990). Considerable research on international air transport in the region (Duval, 2014;Findlay et al, 1997;Bowen and Leinbach, 1995) provides a rich heritage that justifies the use of this regional definition. The figure also shows the seventeen cities with international airports for which a measure on business service connectivity is available, drawn from the GaWC analysis discussed in detail in Section 4.1 below (GaWC, 2012).…”

China’s airline consolidation and its effects on domestic airline networks and competition

“…In a study of newly industrializing countries and regions in East Asia (including South Korea, Taiwan, Singapore, Hong Kong, Philippines, Malaysia, Indonesia, and Thailand), Bowen and Leinbach (1995) identify two Table 1 Growth of civil aviation in China, 1985China, -2006China, . 1985 1990 1995 important modes of state involvement in the airline industry: state ownership of carriers and government regulation of airline competition.…”

“…They therefore all have to find their own ways of liberalizing the airline industry. A number of studies that examine airline liberalization in Europe (Dennis, 1994;Ivy, 1995;Graham, 1997Graham, , 1998Thompson, 2002;Goetz and Graham, 2004;Fan, 2006), in Canada (Oum, 1991;Williams, 1994), in Australia (Forsyth, 1991;Hooper, 1998), and in Asia (Bowen and Leinbach, 1995;Bowen, 2000Bowen, , 2004 have been published.…”