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Mitigating ‘Effective Control’ Restriction on Joint Venture Airlines in Asia: Philippine AirAsia Case

Mitigating ‘Effective Control’ Restriction on Joint Venture Airlines in Asia: Philippine AirAsia... The joint venture (JV) ownership model of low-cost carriers (LCCs) in Asia has been responsible for the expansion of LCCs into their neighbouring countries, enabling them to operate interconnected networks under a single brand. The expansion has not been an easy feat. Respective national laws of these JV LCCs still dictate that 'effective control' should be vested with local investors. However, there are signs that this might not be what is actually happening. A closer look at Philippine AirAsia is taken to carefully examine how national government authorities deal with the issue of 'effective control' and to determine whether the observation on JV LCCs in general also rings true for this particular airline. This topic is timely since many JV LCCs recently established in Asia have developed increasingly significant roles in the market. The legal and regulatory aspects of JV LCCs in Asia will also be looked into to deal with how and why the 'effective control' test under domestic law has been mitigated for those airlines. It concludes with a discussion of the policy implications of such mitigation of the 'effective control' test and some observations which could possibly guide future actions of both regulators and airline companies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Air and Space Law Kluwer Law International

Mitigating ‘Effective Control’ Restriction on Joint Venture Airlines in Asia: Philippine AirAsia Case

Lee; Dy
Air and Space Law , Volume 40 (3) – May 1, 2015
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Kluwer Law International
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Copyright © Kluwer Law International
ISSN
0927-3379
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Abstract

The joint venture (JV) ownership model of low-cost carriers (LCCs) in Asia has been responsible for the expansion of LCCs into their neighbouring countries, enabling them to operate interconnected networks under a single brand. The expansion has not been an easy feat. Respective national laws of these JV LCCs still dictate that 'effective control' should be vested with local investors. However, there are signs that this might not be what is actually happening. A closer look at Philippine AirAsia is taken to carefully examine how national government authorities deal with the issue of 'effective control' and to determine whether the observation on JV LCCs in general also rings true for this particular airline. This topic is timely since many JV LCCs recently established in Asia have developed increasingly significant roles in the market. The legal and regulatory aspects of JV LCCs in Asia will also be looked into to deal with how and why the 'effective control' test under domestic law has been mitigated for those airlines. It concludes with a discussion of the policy implications of such mitigation of the 'effective control' test and some observations which could possibly guide future actions of both regulators and airline companies.

Journal

Air and Space Law – Kluwer Law International

Published: May 1, 2015

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