Some key impacts on the market, and the resultant benefits and costs to the home country, are as
follows:
7th Freedom Entry on Profitable Routes
• The market share and profitability of the home carriers would be reduced;
• The reduction in home carrier profits would be greater than if competition had been
increased as a result of entry by a new home carrier;
• If a 7th freedom entrant has lower costs than a home based entrant, there will be more
pressure on fares and costs;
• Entry by a 7th freedom carrier could be either positive or negative for the home economy;
• If there is weak price competition, it is more likely that the home economy will lose from
entry, since benefits to home travellers and tourism will be small, but the loss of home
carrier profits could be significant;
• If there are only small cost savings, little foreign ownership of the home carrier, and
moderate to large loss of market share by the home carrier, the outcome is likely to be
negative for the home country.