The field of international air transport is one of complex regulation. When it comes to foreign direct investment (FDI) in this area regulators have long sought to protect the industry from outside control and ownership. Recently, however, a more liberal attitude is emerging towards FDI as one which embraces this source of capital. The questions that this dissertation will try to answer are why FDI in air transport is still so strictly controlled in air transport and how it could be regulated in the future.;FDI in basic telecommunications has experienced the same development as international air transport. As in aviation, basic telecommunications providers have been prevented from acquiring excessive foreign controlling capital. This year, however, basic telecommunications was brought under the General Agreement on Trade and Services (GATS). This has resulted in a decrease in the regulatory restraints against FDI.;It is the contention of this dissertation that as in international basic telecommunications, FDI in international air transport should be regulated through the GATS. The paper examines the history of FDI regulation in both fields as well as recent trends to liberalize FDI flow. It concludes with a proposed GATS annex for air transport based on the lessons learned from basic telecommunications.
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