Establishment of air transport undertakings – Towards a more holistic approach

This paper addresses the issue of principal place of business. Principal place of business can be interpreted in various ways in addition to its strict legal meaning in international air law. The term establishment is also relevant because since the Open Skies decisions of the European Court of Justice of 2002, this term has been used, although not reconciled with the existing aviation law regime. The interpretation of these terms is not only an academic exercise; airlines may be able to choose their hubs in relation to the meaning of their principal place of business, and exercise traffic rights from there. The same is true for the interpretation of the term establishment. Since airlines generate about 80% of their revenues from the operation of traffic rights, the choice of criteria for the determination of the term ‘principal place of businesses’ affecting role of airports as hubs under a modernised air law regime. This has practical relevance for the conduct of a future air transport policy.