An Empirical Evaluation for Passenger Markets Before and After Open-Sky Policy between Taiwan and Japan

Abstract

Liberalization progresses in the air transport industry are obvious, in particular the growing numbers of bilateral Air Service Agreements (ASAs). Taiwan government has contracted with many countries for open-sky policies recently, including the deregulation of air transport markets between Taiwan and Japan. The purpose of this study is to evaluate the impact of their open-sky policy on the passenger markets in terms of numerical performance on tourism and air transport. The analyzed results of descriptive statistics from the officially published data in Taiwan reveal that the growth of Taiwanese tourists traveling to Japan was higher than the number of Japanese coming to Taiwan after performing the open-sky policy. However, the Chow-test results show significant differences before and after this policy on the two markets. Furthermore, the Taiwanese airlines had a greater performance growth than that of Japanese airlines on transport markets, including flight frequencies, numbers of new open operational airports, passenger market shares etc. However, both Taiwanese and Japanese airlines still less use the fifth freedom to extend their services.