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US Seeks Open Skies Deal With Canada  
User currently offlineCanadaEH From Canada, joined Jul 2003, 1341 posts, RR: 4
Posted (10 years 11 months 1 week 7 hours ago) and read 5851 times:

U.S. seeks to modify open skies deal with Ottawa, boost airline competition

OTTAWA (CP) - The Bush administration is seeking cross-border free trade for North American airline companies - a concept that would mean serious domestic competition for Air Canada while giving Canadian carriers access to lucrative new routes in the United States.

U.S. Ambassador Paul Cellucci says Washington wants talks on liberalized aviation policies that would include allowing U.S. carriers to transport passengers between points in Canada and Canadian airlines to fly between American cities.

The 1995 Open Skies agreement between Canada and the United States curtailed time-consuming and costly forced connecting flights for passengers travelling between major cities in both countries. Business and tourism traffic have soared since the treaty was struck.

But the deal left several significant restrictions and protections on the airline industry in North America. Airlines in Canada and the United States are free to fly any cross-border route, but they are barred from flying cabotage or domestic flights in each other's country.

"I call it the almost-open skies," Cellucci said in an interview.

"We're interested in engaging on this. I made that clear to (former transport minister David) Collenette. Nothing happened."

That could change very soon.

Europe and the United States are already talking about de-regulation. John Byerly, the U.S. State Department's point man on aviation agreements, will be in Ottawa for a conference on air transport trends Tuesday.

Collenette's successor, Tony Valeri, has indicated he would like to negotiate the possible easing of restrictions on cargo flights into Canada, but wants to consult with Canadians before going any further.

"Minister Valeri has said this is something he would like to discuss," Cellucci noted. "He wants to see what people around Canada think.

"We think it's probably a good time to start discussing things like the cargo issue, as well as things like the cabotage and other issues involving open skies."

Valeri said he has already started meeting with various industry stakeholders, and those discussions would have to be complete before he begins any serious negotiations with the United States.

But the transport minister said in a weekend interview that he was prepared to look at any policies that constitute barriers to growth.

"Certainly opening up the markets is something I'm interested in, with the caveat that I'd have to spend a fair bit of time with the stakeholders. If we can position Canada as a North American gateway, it would be worthwhile having that discussion."

One of the major stakeholders - Air Canada CEO Robert Milton - is a keen backer of the talks.

"At every opportunity Mr. Milton has advocated further liberalization and greater integration of our aviation market," said Air Canada spokeswoman Laura Cooke.

"We are heartened there is support on both sides of the border towards further liberalization, as it represents a win-win solution that would serve to strengthen the close economic relationship between Canada and the U.S., boost both business and tourism, and ultimately benefit the consumer."

U.S. airlines have traditionally been reluctant to liberalize the current aviation agreement, since Air Canada is thought to have been the main beneficiary of the 1995 deal.

American carriers were beginning to warm to the idea just before the terrorist attacks of 2001. But the economic fallout of those airliner assaults brought several U.S. carriers to the brink of collapse, and the ardour for unrestricted air competition across the border disappeared as the U.S. Department of Transportation and the State Department dropped their pursuit of liberalized competition.

De-regulating cargo flights would be a politically sensitive issue for Valeri. FedEx is currently forced to land at the airport in the transport minister's backyard in Hamilton, Ont. Canadian carriers pick up FedEx's cargo from there for distribution across the country.

"I think it's an inefficiency," Cellucci said. "It's inconvenient and it's costing businesses money.

"I'm told that, because of the hub that's there already, if you open this thing up it will probably mean even more business for that city. And I think it's about looking down the road and seeing the opportunities."



EH.
24 replies: All unread, jump to last
 
User currently offlineYegbey01 From United States of America, joined Nov 2003, 1732 posts, RR: 3
Reply 1, posted (10 years 11 months 1 week 7 hours ago) and read 5788 times:

If it means bringing on more competition.. why not.

What would Clive say about this. Would he welcome the likes of WN and F9 to compete directly with WJ.....



User currently offlineYyz717 From Canada, joined Sep 2001, 16370 posts, RR: 56
Reply 2, posted (10 years 11 months 1 week 7 hours ago) and read 5765 times:

This would be largely a non-event. No US carriers are likely to want any Cdn domestic routes anyway...at least not en masse. As for Cdn airlines operating US domestic flights....it could only ever amount to a tiny proportion of the total.

FedEx is currently forced to land at the airport in the transport minister's backyard in Hamilton, Ont. Canadian carriers pick up FedEx's cargo from there for distribution across the country.

Completely untrue. Fedex flies to YYZ from 3 US hubs. The Fedex Canada domestic 727's flew to YHM because YYZ had a curfew....these 727's recently transferred from YHM to YYZ also.





Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 3, posted (10 years 11 months 1 week 7 hours ago) and read 5745 times:

Paul Celucci has just proved how clueless he is about this entire issue. Good grief, this sounds like an oversimplified manifesto of something one of our forum kids would come up with.

User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 4, posted (10 years 11 months 1 week 6 hours ago) and read 5717 times:

Not a bad idea. It would help broaden the base of Canadian airlines - like Air Canada - meanwhile, bringing in viable competition which would further improve the market. It would also help ward off the threat of a duopoly emerging in Canada, again - this time, between WestJet & Air Canada - which could lead to some stagnation in the market.


"Talk to me, Goose..."
User currently offlineLymanm From Canada, joined Jan 2001, 1140 posts, RR: 1
Reply 5, posted (10 years 11 months 1 week 6 hours ago) and read 5682 times:

I'm surprised the Americans are keen to go with this, as even bloated AC has leaner cost structures than many US majors, not to mention skimpy LCCs Canjet, Jetsgo and Westjet. Additionally, the CAD costs (still competitive, even with the fierce rise of the loonie) will enhance the ability for Canuck carriers to compete south of the 49th parallel. The other way around is much less likely.

Some truly believe we'll see AA 757s on YQB-YSJ or similar if we "liberalize" our aviation policy. I have my doubts.



buhh bye
User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 6, posted (10 years 11 months 1 week 6 hours ago) and read 5664 times:

It could work both ways, but I don't think that the impact on either industry would be that huge - I mean, Canada is a drop in the bucket compared to any sizeable US market.... there are less people in all of Canada than there are in California alone.

I do believe, however, that a Customs union with the US would help the air travel industry - not to mention the economic benefits of increased trade - between the two countries far more than an Open Skies agreement would.



"Talk to me, Goose..."
User currently offlineConnector4you From Canada, joined May 2001, 933 posts, RR: 2
Reply 7, posted (10 years 11 months 1 week 6 hours ago) and read 5624 times:

I would go even further and sign an open-sky agreement with US and Europe at the same time. Unlimited cabotage rights between Canada, Europe and US could open up a new era in the aviation industry. This could be the ultimate boost to recovery for the ailing airline community in North America and Europe.



User currently offlineYyz717 From Canada, joined Sep 2001, 16370 posts, RR: 56
Reply 8, posted (10 years 11 months 1 week 5 hours ago) and read 5570 times:

as even bloated AC has leaner cost structures than many US majors,

Not true....AC is far less efficient that US majors. Despite their collective losses, US majors (not to mention US LCC's) are among the most efficient carriers in the world, courtesy of the competitive domestic US market.

AC would die a quick death if it had to compete in a truly open North American market.

Hell, even with a commanding 85% of domestic market share in Canada recently, AC still dove into bankruptcy despite no national competition.




Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineYegbey01 From United States of America, joined Nov 2003, 1732 posts, RR: 3
Reply 9, posted (10 years 11 months 1 week 4 hours ago) and read 5523 times:

I agree that AC would not have a competitive advantge over any entrant from the US. AC has a highe cost structure. I think this would lead to the dismantling of Air Canada and maybe UAL and AC would have to merge before all this happens.

My question is this: Would be you be allowed to fly (for example) from YEG to YUL via MSP on NW for instance???




User currently offlineCanadaEH From Canada, joined Jul 2003, 1341 posts, RR: 4
Reply 10, posted (10 years 11 months 1 week 2 hours ago) and read 5429 times:

YEGBEY, wouldn't customers/US immigration be a pain in the ass for a route like that? I see what your getting at but I really doubt that the US is about to relax on the security and border policies it has in place right now.

I don't think an open skies policy would work, but that's just my opinion.



EH.
User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 11, posted (10 years 11 months 1 week 1 hour ago) and read 5395 times:

YEGBEY, wouldn't customers/US immigration be a pain in the ass for a route like that? I see what your getting at but I really doubt that the US is about to relax on the security and border policies it has in place right now.

As it stands now, I agree that it would be a pain criss-crossing the border or doing trans-border connections. I have, however, heard of connections such as YYC-MSP-YYZ on NW.... but I'll admit that was many moons ago.

I don't think an open skies policy would work, but that's just my opinion.

It would work, but the results might not be pretty for home-grown Canadian carriers. WestJet, for instance, might not be so profitable up against aggressive and efficient US carriers like Southwest, AirTran and JetBlue..... but that's another discussion altogether.



"Talk to me, Goose..."
User currently offlineFLYYUL From Italy, joined Jun 2000, 5010 posts, RR: 51
Reply 12, posted (10 years 11 months 1 week 1 hour ago) and read 5375 times:

AT NW..

YVR/YYC were large connector points out of YUL via MSP.

We had at least 4-5 people on each flight going to each of these destinations.. and YWG also!

Mark


User currently offlineCanadaEH From Canada, joined Jul 2003, 1341 posts, RR: 4
Reply 13, posted (10 years 11 months 1 week 1 hour ago) and read 5350 times:

Now that you mention it, I remember loading bags on NW planes and seeing YVR-MSP-YYZ/YUL tags, so I guess people already do that.. why, I don't know.  Smile

Think about open skies for a second..

Why go into a different market when that market is already saturated with competition and capacity? Why offer service when the product is the same (in the case of WJ, Frontier, JetBlue), the ticket prices are the same (or more expensive if offering transborder), but the customer dedication isn't?

Why, in the case of legacy carriers, try to compete against another (or more) LCC's (ex. AA trying to compete against WJ/AC trying to compete against JetBlue/Southwest) when they are loosing the battle on they're own home turf?

Why put your passengers through the hassle of complicated customs/immigration?

How will some airlines get slots in some larger cities? Will it be a problem?

I think this could make for some good discussion, anyone else have some opinions to share?



EH.
User currently offlineOlympus69 From Canada, joined Jun 2002, 1737 posts, RR: 7
Reply 14, posted (10 years 11 months 1 week ago) and read 5290 times:

Can somebody explain to me exactly what "Cabotage" is. I thought it meant that an airline flying a route, say ORD-YYZ-YUL would be allowed to pick up passengers at YYZ and fly them to YUL or vice-versa, whereas now they can only carry passengers between ORD-YYZ and ORD-YUL. However, I get the impression from reading these posts that a US airline could have a route from, say YYB-YZF, without it being an extension of a route starting at a point in the USA.

User currently offlineLucky727 From Canada, joined Sep 2003, 602 posts, RR: 1
Reply 15, posted (10 years 11 months 6 days 23 hours ago) and read 5282 times:

I think US Legacy carriers & LCC's would quickly mop up several (if not all) tried & true Canadian revenue routes (-about a dozen? how many would you say there are?) Perhaps prices would drop, but only a select few would make those oodles of $CDN.

...then we could have the American Airlines Tower (formerly CN) right across from the WestJet (formerly Air Canada) Centre Big grin



··· [·] oooooooo [·] oooo oo ooooo [·] ooooooooooooooooooo [·]
User currently offlineYyz717 From Canada, joined Sep 2001, 16370 posts, RR: 56
Reply 16, posted (10 years 11 months 6 days 23 hours ago) and read 5266 times:

I think US Legacy carriers & LCC's would quickly mop up several (if not all) tried & true Canadian revenue routes

I doubt it. US majors have very few non-hub routes. I can't see AA flying YYZ-YUL/YVR since YYZ is not an AA hub or crew base.

Regarding hubbing thru the US...I use to fly on business to YVR frequently and would sometimes be booked by my travel dept on UA YYZ-ORD-YVR. As a spotter, I did not mind!




Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineFLYACYYZ From Canada, joined Jan 2004, 1914 posts, RR: 11
Reply 17, posted (10 years 11 months 6 days 13 hours ago) and read 5166 times:

For starters, the US majors would only be interested in the "Big 6" (YVR/YYC/YWG/YYZ/YUL/YHZ). I agree with YYZ717, that as there are no US carriers with hubs/bases in Canada, the so called opportunities are only visions of gradure.

The only LCC's with any visions of Canada might be Jet Blue and Frontier to hub customers at JFK/DEN respectively. Southwest--fair to say NEVER. Westjet will probably stick to WN's model, and stay close to home (with the exception of off-peak charters US/South).

The only true improvements in transborder traffic would be the unification/abolishing of Customs facilities -- something we all though would happen downline with free trade, but given 9/11 don't think that will happen anytime soon.

In-transit facilitation would be the other improvement, and given traffic flow/volumes would only be essential at YVR/YYC (maybe)/YYZ & YUL. Given the fact that AC is the largest transborder carrier at YYZ and US operations are still going to be marooned at T2 until '06/'07, it's really a non-issue for a couple of years.

Personally think the whole thing is a no go for now. The only plus is that Collenette, the ultimate fence sitter and non-communicator is history, and that his successor may open up issues for dialogue.



Above and Beyond
User currently offlineBobnwa From United States of America, joined Dec 2000, 6538 posts, RR: 9
Reply 18, posted (10 years 11 months 6 days 13 hours ago) and read 5149 times:

The Legacy carriers in the US will not start flying say between YYZ-YVR or YUL-YEG for the same reason that many of them don't fly ORD-NYC, ORD-LAX, or PHL-IAH. If one of the points is not a hub they will not fly it.

User currently offlineYegbey01 From United States of America, joined Nov 2003, 1732 posts, RR: 3
Reply 19, posted (10 years 11 months 6 days 13 hours ago) and read 5119 times:

FLYACYYZ,

I don't know where you came up wit hthe Big 6 from.

If you meant to say the big 6 airports in Canada, then you are SO wrong.

YEG has more than a million pax a year than YOW, YWG and YHZ.


User currently offlineCkfred From United States of America, joined Apr 2001, 5311 posts, RR: 1
Reply 20, posted (10 years 11 months 6 days 13 hours ago) and read 5113 times:

I could see legacy carriers trying to fill in holes on their networks.

Take AA, for example. Since CP was merged into AC, AA has had no ablility to sell seats beyond its Canadian spokes. I could see AA flying to YHZ from YUL, YOW, and/or YYZ. These flights would coordinate with arrivals and departures from ORD, MIA, and DFW. YYC could become a small hub with service to Edmonton, Winnepeg, and Vancouver.

You don't have to have a crew base to run a hub. SJU has never been a crew base for AA pilots, but it's been a hub for nearly 20 years.



User currently offlineFLYACYYZ From Canada, joined Jan 2004, 1914 posts, RR: 11
Reply 21, posted (10 years 11 months 6 days 12 hours ago) and read 5071 times:

YEGBEY01

Sorry bud. Didn't mean to snub your fine city. Thought we were talking more about international or more specifically transborder traffic flow patterns..not passenger volumes.

Realize that a lot of US bound traffic being routed through YYC/YVR..would love to see the AC/ACJ flights back to LAX/SFO/DEN.

K...Make that the Big 7.



Above and Beyond
User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 22, posted (10 years 11 months 6 days 12 hours ago) and read 5064 times:

Since CP was merged into AC, AA has had no ablility to sell seats beyond its Canadian spokes. I could see AA flying to YHZ from YUL, YOW, and/or YYZ. These flights would coordinate with arrivals and departures from ORD, MIA, and DFW.

The current agreement already permits carriers to fly progressively cleared flights beyond the gateway city, including conmingled traffic with the only restriction being on the carriage of revenue local traffic.


User currently offlineYegbey01 From United States of America, joined Nov 2003, 1732 posts, RR: 3
Reply 23, posted (10 years 11 months 6 days 11 hours ago) and read 5027 times:

FLYACYYZ,

I live right here in Toronto.

I don't know that YHZ has more transborder traffic then YEG. Or even YWG or YOW for that matter.


YEG has service to SEA, DEN, MSP, IAH and PHX. Starting this March, they will have daily flights to LAS on HP.




User currently offlineYyz717 From Canada, joined Sep 2001, 16370 posts, RR: 56
Reply 24, posted (10 years 11 months 6 days 11 hours ago) and read 4984 times:

The current agreement already permits carriers to fly progressively cleared flights beyond the gateway city, including conmingled traffic with the only restriction being on the carriage of revenue local traffic.

Correct, but for passenger flights only. An example includes AA DFW-YYC-YEG with no local traffic betw YYC & YEG.

For all-cargo flights, even this is not allowed. Fedex must terminate at YYC and hand EGb bound freight to a local Cdn carrier.

I could see AA flying to YHZ from YUL, YOW, and/or YYZ.

I disagree. This would mean that YYZ would become an AA mini-hub. It will never happen.




Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
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