Why do countries usually reserve domestic airline routes for their own airlines?

In the context of air law, the practice of reserving domestic airline routes for a country's own airlines is known as cabotage.1

This restriction is rooted in the fundamental principle of international air law that every state possesses complete and exclusive sovereignty over the airspace above its territory. Because a state has the authority to regulate all activity within its borders, it maintains the right to control commercial transport between points within its own territory.2

While international agreements, such as the Chicago Convention on International Civil Aviation, facilitate international air navigation and the exchange of traffic rights between nations, the right to carry domestic traffic remains a protected privilege typically reserved for a state's own national carriers.2