Is it in Germany's economic interest to allow Emirates to fly to Berlin? A framework for analysis

• A critique of alternative ways of evaluating airline liberalisation.
• An outline of the cost benefit approach to evaluation.
• An analysis of aspects which have rarely been explored, such as foreign investment and inbound tourism.
• A framework to evaluate whether Germany gains from permitting Emirates to access Berlin.

The economic approach (as compared to the traditional exchange of rights approach) to evaluating international aviation liberalisation proposals is gradually becoming more commonly used. With it, the various benefits and costs of liberalisation are assessed in a cost benefit framework. This approach is used to develop a framework to evaluate whether Germany will gain or lose from allowing airlines of the United Arab Emirates, and specifically Emirates Airlines, to fly to Berlin. This is something that the German government has so far refused. The economic approach is still evolving, and several new aspects of cost and benefits are being recognised and evaluated, for example the implications of foreign ownership of airlines, and benefits from inbound tourism. In this paper, a framework for determining whether Germany will gain from allowing these airlines access to Berlin is set out, and indicative conclusions are drawn.