Cabotage
The transport of passengers or goods between two domestic points by a foreign-registered carrier, which is prohibited or tightly restricted in most countries.
Cabotage refers to the operation of commercial transport services — by air, sea, or road — between two points within a single country by a carrier registered in another country. In aviation, cabotage rules prevent foreign airlines from selling and operating flights between domestic city pairs within another nation's borders. These restrictions exist to protect domestic carriers, national employment, and in some cases aviation security.
Why it matters
Cabotage restrictions shape the competitive landscape of aviation markets and directly affect the route options available to corporate travel programmes. In countries with strict cabotage rules, foreign carriers are limited to international routes, meaning domestic connections must be made with domestic airlines — often at different pricing levels and with different service standards. Understanding cabotage helps programme managers explain why certain route combinations require a carrier change and why pricing on domestic legs may not follow international patterns.
How it works in practice
Most bilateral aviation agreements include explicit cabotage prohibitions. When a foreign airline attempts to sell a domestic routing within a restricted country — for example, a European carrier selling London-to-Manchester as a standalone fare — it would be operating in violation of cabotage law. However, cabotage rights have gradually been extended in some regional blocs: EU carriers can freely operate domestic routes within any EU member state, and some open-skies agreements include limited cabotage provisions.
The takeaway
When building itineraries in markets with strong domestic aviation sectors — the US, India, Brazil, China, Japan — always check whether the preferred international carrier can actually operate the domestic connection or whether a separate local carrier booking is required. Assuming a single carrier can handle an entire multi-leg journey in these markets without checking cabotage rules can create booking failures.