Mongolia: Impact from International Air Service Liberalization

The Economic Policy and Competitiveness Research
Center is pleased to present the findings of the study on “Mongolia:
Impacts of international air service liberalization.”Download full
report here.
Mongolia presents a dynamic air service market with significant
potential for growth as its national economy expands. Although the
Government of Mongolia has executed bilateral air service agreements
(bilaterals) with over 30 foreign states, there are only four major
routes which regularly connect Ulaanbaatar to critical international
hubs in Beijing, Moscow, Seoul and Tokyo. Most of Mongolia’s bilaterals
contain tightly controlled designations for carriers, routes, airports,
capacity, frequency, and pricing.

There is considerable empirical evidence confirming that the
liberalization of air services provides benefits for consumers including
lower fares and more air services. Furthermore, liberalization will
contribute to the overall improvement of the Mongolian economy in terms
of a growing gross domestic product (GDP) and increasing employment
throughout Mongolia.

The purpose of this study was to examine the
potential impact of air service liberalization in Mongolia and to
provide some insights as to how Mongolia might approach more liberalized
air services.