The 1944 Chicago Convention failed to create open skies, shaping air travel for decades

The 1944 Chicago Conference didn’t produce a single open-skies treaty. It produced a two-layer compromise: a thin Two Freedoms Agreement covering overflight and technical stops, plus a bilateral escape hatch that became the dominant model. The automatic frequency trigger Washington wanted failed.

Bermuda replaced it in February 1946 with capacity classification and after-the-fact review. That bilateral template, not the failed multilateral dream, is what today’s Open Skies deals still echo.

The escalator clause Chicago couldn’t sell

The American delegation didn’t just argue for open competition. It brought a mechanism: once a route hit 65 percent capacity, an airline could add frequencies automatically. According to the Southern Methodist University- Journal of Air Law and Commerce, the idea put the negotiations into a standstill. British resistance and a wider unease about American manufacturing dominance stopped it cold.

The binding counterpart that arrived in February 1946 — the Bermuda Air Services Agreement — contains no such trigger. Its Final Act, recorded in UK Treaty Series No. 3 (1946), set out something less mechanical: primary and supplementary capacity, fair and equal opportunity, and ex post facto review. Airlines could still grow. They just had to justify it after the fact.

Why the multilateral dream shrank to two freedoms

The other half of the Chicago compromise was thinner than anyone expected. On 7 December 1944, states signed two separate instruments. The International Air Services Transit Agreement — what people mean by the Two Freedoms Agreement — grants a scheduled service the right to fly over a state’s territory without landing and to land for non-traffic purposes, like refueling or mechanical attention.

The Air Transport Agreement, signed the same day, listed five freedoms and added commercial third-, fourth-, and fifth-freedom rights. But the five-freedoms package never became universal. Some countries, including Brazil and other South American states, backed the U.S. blueprint. They wanted through-traffic recognition and a role in complaint procedures — and they got those.

Ireland and the Netherlands went further, accepting fifth-freedom rights early. American executives Ralph Damon and Cyrus Smith then warned Britain’s civil air attaché that continued obstruction would push U.S. carriers into a KLM partnership flying around the United Kingdom. That pressure helped shift Britain toward the more flexible posture that showed up at Bermuda.

How the bilateral fallback became the global default

The Bermuda template didn’t disappear. It evolved. The United States began actively pursuing Open Skies agreements in the early 1990s, after the domestic deregulation of 1978. The standard U.S. template calls for eliminating restrictions on routes, capacity, and frequencies, letting airlines set their own fares, and extending rights beyond third and fourth freedoms into fifth-freedom territory and beyond.

The EU–U.S. Air Transport Agreement, signed in April 2007 and in force from March 2008, removes country-pair limits and lets carriers fly between any point in the United States and any point in the EU. It still fell short of Europe’s most ambitious goals on ownership and cabotage. In Asia-Pacific, U.S.–Japan Open Skies, the Australia–New Zealand Single Aviation Market, and ASEAN’s staged liberalization all follow the same bilateral and regional logic.

Fifth- and seventh-freedom disputes — U.S. carriers’ deep Asia networks, Gulf carriers’ fifth-freedom services — get settled through consultations and the threat of traffic-right curtailment. Not by a multilateral court. That is Bermuda’s real legacy.

What one absent country did to the framework

The Soviet Union didn’t come to Chicago in 1944. It also never adhered to the Air Transport Agreement. That absence did quiet work. The five-freedoms package was never universal, because the signatories never covered the whole map.

At Bermuda, U.S. and U.K. negotiators assumed commercial rights beyond overflight and technical stops would be exchanged only where politically acceptable. The result was a minimal multilateral floor — the Chicago Convention plus the Two Freedoms — while substantive third-, fourth-, and fifth-freedom rights stayed bilateral. Routes that would otherwise cross Soviet-controlled airspace became the clearest example.

PICAO, the provisional body created at Chicago to study costs, infrastructure, and traffic, later became ICAO. But the political deal-making moved elsewhere: government to government, route by route.

What 1944 still decides about your ticket

If a route feels restricted or expensive, the reason often sits inside a bilateral air services agreement rather than pure market logic. The EU–U.S. deal removed country-pair limits, but it didn’t touch ownership or cabotage — which is one reason airlines still can’t simply operate wherever they like.

When carriers clash over fifth-freedom rights in Asia or South America, governments settle it through consultation and pressure, not a tribunal. That’s the Bermuda playbook from 1946, still running quietly behind today’s schedules and fares.

So next time a corridor has only one dominant carrier or a fare that doesn’t seem to compete, remember Chicago. The framework allows liberalization, but only as far as two governments can agree.

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