The Effects of Dominant Airlines on Open Skies Agreements

Abstract

We investigate the determinants of open skies agreements among Latin-American countries, focusing on the impact of having a dominant airline on the willingness of countries to sign agreements with others. We find that, overall, the likelihood of signing agreements increases with trade volume, passenger traffic, and distance. In relation to our main question, we find that a having a dominant airline decreases the probability that third countries concede open skies agreement.