The impact of the China-ASEAN Open Skies Agreement on bilateral air transport

This paper applies simultaneous equation model to investigate the impact of China-ASEAN Open Skies Agreement (CAOSA) on bilateral air transport using annual panel data spanning 2011 to 2019. Results show that CAOSA significantly increased both flight frequency and air passenger volume between China and ASEAN. Further heterogeneity analyses find that: (1) Compared to new ASEAN members, the positive effects on flight frequency and air demand are more pronounced between China and old ASEAN members. (2) CAOSA significantly increases flight frequency or air passenger volume in the Pearl River Delta and Yangtze River Delta regions, while no statistically significant impact is found on the Beijing-Tianjin-Hebei region. (3) CAOSA significantly increases the flight frequency of China first-tier cities, and no significantly impact is found on China second-tier cities. (4) CAOSA has significantly positive impact on flight frequency and air passenger volume of medium- and long-haul air routes, while has no significantly impact on short-haul routes. Our findings are valuable complements to existing research on open skies, offering significant policy implications for the government and the industry.