Cabotage, Then and Now

 - September 20, 2006, 11:03 AM

The practice of cabotage has its origins in early Portuguese history, in a time when Spanish ships sailing between northern and southern Spain would stop at Portuguese cabos, or capes, to pick up and drop off paying passengers and cargo. Portuguese coastal shippers, rightly figuring that this was cutting into their profits, cried foul. And so the practice, now called cabotage, was outlawed. Today, restrictions on cabotage are common in most countries, to a greater or lesser degree, and apply to air transport as well as shipping.

With the growth of international air travel that followed World War II, cabotage became a subject of much discussion with regard to aviation. As might be expected, there were differences of opinion.

As long ago as 1944, representatives of 52 nations met in Chicago with the intent of producing a liberal, multilateral “free skies” agreement. While eight “freedoms of the skies” were listed, only the first two received widespread agreement. As for the last freedom on the list– “The right of an airline to carry traffic between two points within the territory of a foreign state”–it found few advocates and no consensus.

Today, the U.S. and virtually every country in the world has, and enforces, its own rules of cabotage. The U.S. Department of Transportation defines cabotage as “the carriage of air traffic that originates and terminates within the boundaries of a given country by an air carrier of another country.” And it adds, “Rights to such traffic are usually entirely denied or severely restricted.”

Cabotage rules are a fact of life in most countries, NBAA points out, and can be expected wherever a company’s aircraft operates outside its native country.

Penalties as high as $250,000 have been levied on business aircraft operators violating cabotage, and others have had their aircraft impounded while the situation was examined, debated and resolved.