In this report, the meaning of liberalisation in the air transport sector is discussed and the difference between deregulation and liberalisation is highlighted. Liberalisation entails a progressive opening up of a market with state control enacted over the process, while some amount of regulation may be required to ensure that market forces operate effectively and that some rules are followed in the process of air transport. The government has a key role to play in developing and implementing a transparent, non-discriminatory framework that facilitates competition, expands airport capacity and contains anti-trust laws.