A bilateral air services agreement is reached between two states parties, which liberalizes commercial civil aviation services between these countries. Bilateral air services agreements allow designated airlines in these countries to operate commercial flights covering passenger and cargo transport between the two countries. In addition, they generally regulate the frequency and capacity of air services between countries, pricing and other commercial aspects. One of the first AAS after World War II was the Bermuda Agreement, signed in 1946 by the United Kingdom and the United States. The characteristics of this agreement have become models for the thousands of agreements that were to follow, although in recent decades some of the traditional clauses of these agreements have been amended (or “liberalized”) in accordance with the “open skies” policy of some governments, particularly the United States.  It is clear that some BASAs have been negotiated or renegotiated without fully considering the trade elements necessary to enable the industry to benefit from the proposed targeted benefits of BASA, and the focus has not been on the economic conditions in which the country operates. For example, most agreements provide for the payment of royalties to the Nigerian government if Nigerian designated carriers are unable to return the favour under the agreement. This may be a reasonable way to increase government revenues under the agreement, but it does nothing commercial for the industry. In some cases, agreements have been signed to stop the payment of these royalties. In contrast, in 2014, Emirates reached an agreement with the South African authorities for additional frequencies between South Africa and Dubai. It was reported that the additional frequencies were granted on the condition that the airline pay 40 per cent of the cost of each ticket to South Africa Airways. As such, there was a commercial advantage for the national airline and the nation, through enlargement. It is recommended that the government consider similar or other business options to encourage domestic carriers to continue their operations and possibly expand their operations internationally.
The idea is not to reduce the frequencies or entry points of foreign airlines, but to elevate the domestic aviation industry to a level of competitiveness that would compete with any foreign country. In addition, government and industry stakeholders need to look internally at improving air transportation infrastructure and other related areas to strengthen our bargaining power before trying to renegotiate existing agreements or negotiate future agreements.