This document summarizes the evolution of aviation liberalization from traditional bilateral air services agreements to more open agreements like "Open Skies". It discusses how early liberalization in the 1978-1991 period led to more freedom around capacity, pricing, and designation of multiple airlines. However, liberalization has not improved airline profitability overall. The document argues that further progress requires relaxing ownership nationality rules to allow for more cross-border mergers and consolidation in order to reduce overcapacity and costs in the industry. Unresolved issues around domestic cabotage and competition rules with expanding alliances also need addressing for long term profitability.