Empirical analysis on economic effects of liberalization in the context of African airrnTransport sector is not much discussed in the literature and the continent's policy makers andrnThe industry operators need such analysis to implement liberalization initiatives. As such, ThernPurpose of this study is to empirically measure economic effects of progressive air transportrnliberalization in Africa by taking the case20city-pair routes to/from Addis Ababa for thernPeriod 2000-2005. by employing a Two-stage least square estimation procedure for a Panelrndata set, passenger demand. fare and departure frequency models are estimated to see thernimpact of bilateral air service agreement (BASA) liberalization. Liberal policies arernassumed to affect the two supply side variables i.e. fare and departure frequency.rnaccordingly, The frequency model indicates that a significant increase in departure frequencyrnis observed in routes that experienced both ' full' and 'restricted ' type of liberalizationrncompared to those governed by restrictive bilateral arrangements. in Addition. Higher increasernin the number of departure frequency in routes which experienced restricted liberalizationrnrelative to those operated under fully liberalized arrangement is observed. regarding the farernmodel, a statistically significant negative impact of liberali zation policy on standard economyrnfare is not found . Finally, It is recommended that liberali zing BASAs, Especially ProvisionsrnPertaining to departure frequency will enhance service quality.