Managing Bilateral Arrangements

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In negotiating and managing bilateral arrangements, the objective of the Department for Transport's International Aviation Negotiations (IAN) Division is to increase consumer benefits by permitting the operation of a wider range of services. This involves negotiating traffic rights from more airports in the UK to more destinations abroad, gaining access for more airlines to compete on routes which are already served and allowing airlines to compete on price.

IAN aims for agreements which provide airlines the freedom to set their own fares, provided that they are pro-competitive and which do not limit the number of airlines or frequencies on routes to be served, so leaving airlines free to mount the capacity they believe to be appropriate to serve the market.

Greatest progress has been achieved in Europe where the establishment of the European Single Aviation market means that any European Union airline can operate where it likes within the European Economic Area (EEA) at whatever frequency it wishes.

IAN is actively engaged in negotiating liberal agreements with countries in other parts of the world, but progress is often slow for a variety of political and economic reasons.

Where a UK or (where permitted under the bilateral) Community airline wishes to operate international services, it must be "designated" under the bilateral with the third country. DfT's designation policy can be found here [link to Designation Policy]. Airlines must have an Air Operator's Certificate (AOC) and route licence in order to apply to be designated. The Civil Aviation Authority (CAA) issues AOCs and route licences. Further details can be found at the CAA's web site.

  • "Code sharing" is a marketing tool used increasingly by airlines. Under code sharing, airline A operates a flight and may carry the "codes" (i.e. flight designator or flight number) of airline B. A flight can carry several different codes. IAN is currently reviewing DfT's code sharing policy. The revised policy will be placed on this web site.