Source: Wikipedia
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 a shipping term, 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 used in the context of "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 aviation cabotage, for reasons of economic protectionism, national security or public safety. One notable exception is the European Union, whose members all grant cabotage rights to each other.
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. Until 1991 Lufthansa was prohibited from flying to West Berlin, so Pan Am, British Airways, and Air France operated the routes between the Federal Republic of Germany and West Berlin. For a short time in the late 1980s, Trans World Airlines 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, which also allows British carriers 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, Australia and Rarotonga of the Cook Islands. Previously, Qantas Jetconnect and Ansett New Zealand were Australian-owned airlines based in New Zealand.
