Cabotage

Not to be confused with sabotage.

Cabotage /ˈkæbətɨdʒ/ is the transport of goods or passengers between two points in the same country by a vessel or an aircraft registered in another country. Originally starting with shipping, cabotage now also covers aviation, railways and road transport. Cabotage is "trade or navigation in coastal waters, or, the exclusive right of a country to operate the air traffic within its territory."

Cabotage is commonly used as part of the term "cabotage rights," the right of a company from one country to trade in another country. In aviation terms, it is the right to operate within the domestic borders of another country. Most countries do not permit cabotage by foreign companies, although this is changing within Europe for member states of the European Union. Economically, cabotage regulations that limit trade to domestic carriers constitute a form of protectionism. Within a nation, cabotage rules may be politically justifiable for that very purpose, or because of national security or public safety concerns.

Example situations

In the context of the freedoms of the air, pure cabotage is the ninth freedom. An example of this situation would be if a service between St. Louis and Denver was offered by a non-U.S. carrier without continuing service to a foreign destination. While this situation is virtually nonexistent in scheduled service, certain charter flights are allowed under U.S. rules.

If service offered between two domestic points continues to or from a foreign destination, the practice is considered continuing cabotage, which is the eighth freedom. If a carrier does not have this right, then on a hypothetical service from Paris to Kolkata via Mumbai, it could not allow passengers to board in Mumbai and fly to Kolkata; only passengers who boarded in Paris could be carried on to Kolkata.

Cabotage situations can also occur as a consequence of hub-and-spoke operations. Consider that Air Canada has a major hub at Toronto that offers flights to several U.S. cities. While a passenger is able to buy a ticket from Boston to Toronto, and a separate ticket from Toronto to Seattle later that same day, both flights cannot be offered on the same itinerary because this would effectively be a U.S. domestic service.

Cabotage in passenger aviation

Australia and Chile allow passenger airlines owned by foreign entities to operate domestic flights.^{[citation needed]} Until 1991, Lufthansa was prohibited from flying into West Berlin. Pan Am, British Airways, and Air France operated routes between the Federal Republic of Germany and West Berlin. For a short time in the late 1980s, TWA also flew between then-West Germany and West Berlin. During this time, Pan Am flew to Tegel, in Berlin, from Munich-Riem Airport (now closed) and Frankfurt. Air France flew from Düsseldorf. British Airways flew from Munster/Osnabrück, Hannover, and some other cities.

In October 2007, the United Kingdom granted Singapore carriers the right to fly domestic UK routes as part of an open skies agreement. Under the agreement, British carriers were allowed to fly to any city from Singapore.

The Closer Economic Relations agreement allows Australian air carriers to fly domestically and internationally from New Zealand and vice versa. Two Australian carriers, Jetstar (a Qantas subsidiary) and Pacific Blue (a Virgin Australia subsidiary) fly domestic routes within New Zealand, and Qantas offers flights connecting New Zealand and North America. Air New Zealand offers one international destination from Australia outside New Zealand, flying between Sydney and Rarotonga. Previously, Qantas Jetconnect and Ansett New Zealand were Australian owned airlines based in New Zealand.

See also

• Jones Act
• Freedoms of the air
• Passenger Services Act
• Open skies
• Protectionism

External links

• U.S. Cabotage lobbying organisation
• European Commission > 3rd railway package including cabotage
• "European transport policy for 2010 : time to decide" European Union Commission White paper