General Agreement on Trade in Services and Aviation Ground Handling Services -A Theoretical Perspective.

Abstract

This paper explores the status of the Air Transport in General Agreement on Trade in Services (GATS) vis-à-vis opening of the Aviation Ground Handling market. The study is focused on the developments in terms of open market access to aviation ground handling services and developments in the GATS Air Transport Review. The study attempts to find answers to the questions: Is there a need for extending the GATS coverage to include some more auxiliary services, especially the aviation ground handling services? India shows a steady growth prospects for the aviation sector. Recently, it has opened up the sector to Foreign Direct Investment of upto 49% in the airlines. What is the case for India? The study reveals that India, though having a steady growth in aviation sector, has been cautious in opening of the sector, especially the ground handling services market to foreign participation. It had followed the 'gradual change' policy in this service market since 2007. Another fact that emerged is that the Member States (of WTO) may file the commitments under GATS, in case of air transport, but it does not directly lead to open market access and face the overall constraints of the national policy and domestic regulations and primarily the airport infrastructure capacity constraints limiting the entry and consequent competition of open market access. Compliance of national and international obligations of safety and security in aviation operations also pose certain constraints in free or open market access. Conclusions and limitations of the study are included.