Abstract:

The civil air transport industry is a technology- and capital-intensive industry providing services crucial to the conduct of international trade. As such, it plays an important role in the overall international economy. Furthermore, as the civil air transport involves questions of sovereignty, national security, international aviation negotiations, aviation safety and the allocation of scarce airspace resources, the industry has always been subject throughout the world to strict government supervision. However, in keeping with the international trend toward deregulation of the civil aviation industry, the Ministry of Transportation and Communications in 1987 began implementing an “open skies” policy. With the opening of new domestic air routes and the entry of new carriers into the market, that market gradually shifted from a monopolistic one to a competitive one characterized by the rise of new carriers and a trend toward mergers and cooperative operations.

How will such integration, strategic alliances, and cooperative practices affect market competition? How should relevant regulatory and competition policy be designed? What role should competition laws and competition authorities play in the civil aviation industry? These are all questions that this report seeks to explore. The report’s authors conducted their research by collecting and organizing relevant domestic and foreign academic papers and information on actual cases involving application of the law, and they also collected and organized industry data from the domestic and international civil aviation industry on an ongoing basis. From these information sources, relevant research topics have been culled for further exploration and discussion, along with case studies of Chinese Taipei’s prior application of the law. The objective of these discussions is to draft proposals to address the relevant problems.

The report itself comprises seven chapters, with Chapter 1 comprising the preface. Chapter 2 summarizes the unique characteristics of the aviation industry. Chapter 3 deals with the current state of development of Chinese Taipei’s domestic civil air transport industry while Chapter 4 outlines developmental trends in the international civil air transport industry. Chapter 5 provides analysis of various competition issues in the international civil air transport industry. Chapter 6 details the scope of applicability of Chinese Taipei’s Fair Trade Law to the civil air transport industry, and presents case studies of the law’s application. Chapter 7 presents conclusions and recommendations.

The report conducts an in-depth exploration of various competition issues within the international civil air transport industry, and examines the Fair Trade Commission’s handling of existing regulations regarding competition within the civil air transport industry. This exploration is accomplished by examining regulatory and competition policies toward the civil air transport industry, and includes an analysis of the industry’s unique economic characteristics, a description of the current state of development of the domestic civil air transport industry, and a delineation of current developmental trends in the international civil air transport industry. The report brings the reader up to date on the latest developmental trends within the industry and potential competition issues that could arise therefrom, defines the role of the competition authorities in the air transport industry, provides the Fair Trade Commission with a reference tool for the handling of future cases of restrictive and unfair competition practices within the civil air transport industry, and even serves as a reference for the competent authorities for civil aviation in their drafting of future regulatory and competition policies.

Written by:
Kuang-Yu Hu, Wen-Hsiu Lee, Li-Na Lu, Chi-Jung Liu, Hsien-Chou Liao, Su-Yen Yeh（First Department）