ViveLeYHZ
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Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 7:09 am

I am not sure if this topic was discussed earlier, I suspect it might have (indirectly) in the past. Still, I would like to get people's thoughts on this issue, given current state of the airline industry, especially in the US. Here is a "new" development.

The Globe and Mail (link) and CTV (link) reported that Canadian Transport Minister Jean Lapierre wants to pursue an new open-skies agreement with US, when Transportation Secretary Norman Mineta visits Ottawa later this month. If approved, US airlines will be allowed to carry Canadian passengers between Canadian cities, and vice-versa for Canadian airlines.

What is interesting that the US secretary is in Ottawa to commemorate the 10th anniversary of the Canada/US first "open-skies" agreement, which I think only lacks the 8th freedom (cabotage).

In the not too distant past, the Americans were very welcoming to the open-skies concept, and so was (and still is) Air Canada's CEO Milton. But a lot has changed, including 9/11, high oil prices, US and UA (and DL near-) bankruptcies, not to mention the already high level of competition in both countries right now.

What do the US administration/airlines/public think of the idea of a full open-skies agreement. I personally see it as just another form of free-trade, and one of the final steps in deregulating the airline industry. But, like many others, I am not quite sure if this is the right time for such an agreement. It could be the final straw that could break some airlines, ruining some people's livelihoods.

Any thoughts ???

Cheers,
ViveLeYHZ
 
zvezda
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 7:24 am

This would be a wonderful boost to competition, with more choices, lower prices and better service for passengers. Bring it on!
 
Boeing7E7
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 7:30 am

Not so sure that's a wish he'd want granted...
 
roseflyer
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 7:37 am

I'd love to see this. Even with full 8th freedoms, I don't think any airline is going to completely go in and infiltrate the other country. I do expect to see some more competition and logical routes. Some possible examples of those that would benefit would be:

Westjet to Hawaii via US west coast
Alaska/Horizon beefing up their YVR focus city and connecting traffic from
smaller Canadian cities to YVR
More low cost transborder service since a carrier like B6, F9, or WN could
connect some dots within Canada to maintain a large enough presence to
warrent another station
YYZ being opened up as a possible connection point for US transcons
ORD, DTW, MSP being used as a transfer point to offer more options then just
AC, for connecting traffic between small destinations in Canada


Overall I think it would be good for competition and open up some more flights. It will give carriers more room to expand, which I see as a good thing. Hopefully it will come through, because with preclearance flying between the US and Canada is a breeze.
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aa757first
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 7:49 am

Hell no!

We have enough competition as it is. Air Canada is bleeding cash all over the place with JetsGo and WestJet and SkyService and who ever else their is. So why not add jetBlue, Southwest, USA 3000, AirTran and Frontier to that. And vice versa. All in all, its a horrible idea.

AAndrew
 
AeroWesty
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RE: Minister Wants Full Open-Skies Between US-Cana

Wed Feb 09, 2005 7:49 am

It's interesting that Canada is bringing this up, since the way hubs are arranged, I would think American carriers would benefit most.

Canadians would be able to transfer at hubs close to the U.S.-Canadian border such as MSP, ORD, DTW, CLE, etc., and buy a ticket between two Canadian points via the U.S. without having to "marry" two tickets via a U.S. mid-point as they do now, and v.v. The only comparably sized hub in Canada to siphon off U.S. traffic would seem to be YYZ.

I believe it's short-sighted to concentrate on the cabotage rights to operate services point-to-point within each other's country, dismissing the obvious modified 6th Freedom hubbing opportunites that could rake off a substantial amount of traffic (a modified 6th being the right of an airline of one country to carry traffic between two points of a foreign country via its own country of registry). The reason being that it would take resources and assets to operate new point-to-point services, and literally nothing beyond advertising to move Canadians via U.S. hubs.
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yyz717
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 7:58 am

This is nonsense.

US airlines would not be interested in flying domestic Cdn services for several reasons: such flights would be non-hub point to point, they would be low yield.

Similarly, Cdn airlines collectively have so little capacity, they have little financial ability to open any sort of US hub or expand into US domestic routes.

If this is ever approved, I don't see more than a small handful of routes being added. This is not worth the time of our government transportation bureaucrats.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
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ERJ170
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 8:00 am

I agree with YYZ.. it sounds nice but it is not practical at all... I believe that the current agreement is beneficial to all and should remain..
Aiming High and going far..
 
B747-437B
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 8:06 am

Canada/US first "open-skies" agreement, which I think only lacks the 8th freedom

The Canada-US open-skies has the two following key restrictions :

a) No fifth freedoms (with 2 specified exceptions viz. HNL-Australia and YQX-Europe);
b) All-cargo services are restricted to a single point in the other country (with 1 exception viz. SDF-YHM-YYZ), even without traffic rights.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
sebring
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 8:19 am

Even if true open skies is just a pipe dream being discussed to make politicians look pro-consumer, there are opportunities for moderate liberalization, including more fifths and expanded cargo rights, as per B747-437B's message. However, if indirect cabotage were permitted, it would favor Canada, not the US as AeroWesty suggests. Domestic US routes operated via Canadian connections would not involve any customs clearance. Because of preclearance at Canadian airports, a passenger could fly LAX-YYZ-BOS and never enter Canadian airspace, just make gate to gate transfers, never leaving the "precleared" area of YYZ. A passenger doing the reverse thing - let's say YUL-ORD-YVR - would have to be pre-cleared at YUL, and then clear Canadian customs again at YVR. The US domestic routing via Canada would be no different than any US domestic connection, but the Canadian domestic routing via a US airport, IMHO, would have to be really, really cheap to entice passengers to do the customs thing twice. Imagine arriving in Vancouver at the same time as a couple of 747s from Asia.



 
AeroWesty
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 8:20 am

On further thinking, the only reason beyond additional 5th Freedom rights I could think that this could be advantageous to the Canadians, is if, and only if, Canada had less of a requirement for the percentage of domestic investment in an airline in comparison to U.S. laws and still be able to call Canada its country of registry.

Then it would allow someone like Branson to open a VirginCanada to run domestic operations in the U.S. instead of a U.S.-based airline, and control a greater percentage of the company.

It's a big if though, and I don't have details on the limits of foreign investment in a Canadian airline.

Cheers.

(If anyone does know what the Canadian rules are regarding foreign ownership of airlines is, it'd be interesting to know.)
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AeroWesty
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 8:27 am

Because of preclearance at Canadian airports, a passenger could fly LAX-YYZ-BOS and never enter Canadian airspace

Don't you mean "Canadian pre-clearance at American airports"? It's been ages since I've been to Canada, but I thought there were now some U.S. pre-clearance facilities setup for passengers flying from Canada to the U.S. too. If I'm incorrect on that, you've certainly got a point, I'll concede that.  Smile
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ACAfan
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 8:48 am

NW at MSP will be the clear winner if this goes through
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petazulu
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 9:02 am

ACAFan,
Why? If I am Canadian- why would I want to go through customs in order to get from YVR to YYZ? I can only see this benefitting AC, because I could go from LGA to LAX without clearing immigration and customs. Canada has special sections of their airports marked off for US flights. The US does not.
 
AeroWesty
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 9:22 am

It appears Robert Milton not only is for liberalized open skies between the U.S. and Canada, he has a fondness for shrimp:

http://www.aircanada.com/en/about/media/presentations/yorku.html

And the U.S. is for it, but not many people who responded to the news:

http://www.vivelecanada.ca/article.php/20040125183636299
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ViveLeYHZ
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 10:04 am

It would be awesome if clearing customs can be made easier, or even better gotten-rid-of all together, for passengers originating and arriving in the same country.

I must admit, the issue of clearing customs never crossed my mind when I posted this topic, none the less, I think it is about time that our two countries have a single aviation market. Canada and the US have more flights between them than any two other countries.

What about the EU countries ? Is there a full open-skies between any of the EU countries ? Flights entirely within the EU are treated as domestic, hence no customs, so at least they don't have this problem.

Cheers,
ViveLeYHZ
 
MAH4546
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 10:27 am

I think it's a great idea.

The only thing this will really change is that US and Canadian customers can now fly domestic via an international point, which adds compietition. Airlines won't be rushing to start cabatoge routes. I don't see it hurting much.
a.
 
bkonner
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 10:45 am

Howdy,

EU carriers can fly where ever they want to within the Union. EasyJet has a large "domestic" network in France. Flights within Schengen states (including Belgium, Holland, Luxembourg, France, Germany, Italy, Spain, and a few others) do not require customs clearance if the flight originated within this territory. Flights from Schegnen states in the EU to non-Schengen states in the EU (including the UK and Ireland) may require some form of passport control.

Bkonner
 
zvezda
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 11:30 am

This might be a good step toward eliminating customs and immigration between the US and Canada. Full open borders would save billions of dollars a year in unnecessary bureaucracy that wastes everyone's time. Air liberalization would put pressure on the governments to further liberalize. If European countries can open their borders, then the US and Canada can too.
 
lh477
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 12:58 pm

This might be a good step toward eliminating customs and immigration between the US and Canada. Full open borders would save billions of dollars a year in unnecessary bureaucracy that wastes everyone's time. Air liberalization would put pressure on the governments to further liberalize. If European countries can open their borders, then the US and Canada can too.

Would never happen. The US is already quiet paranoid about Canadian
immigration and our "soft" immigration laws....Many in the US still believe
the 9/11 terrorists came through Canada. Only way possible would be if Canada became 51st state.

I imagine Canadian airliners would be salivating at the prospect of doing
US domestics...I don't imagine the same feeling from the US carriers....
The Canadian domestic market may be too small for US carriers.....
Come on you gunners......!!!!!
 
N1120A
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 4:14 pm

>Air Canada is bleeding cash all over the place with JetsGo and WestJet and SkyService and who ever else their is. <

Did you look at the recent AC financials. They are much, much stronger than they were, and turning an operating profit
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ac7e7
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RE: Minister Wants Full Open-Skies Between US-Canada

Wed Feb 09, 2005 4:21 pm

It would benefit the Canadian airlines much more than it would the U.S. airlines. U.S. carriers would simply focus on major cities. If it were allowed, I suspect there would be a period in which Canadian carriers would have access to the U.S. market before U.S. carriers had access to the Canadian market, like Open Skies in the 90s. Also, if this was allowed, we may see AC make further orders for Embraer jets. AC could very well be in a good position to take advantage of a new open skies deal.

-AC7E7
 
zvezda
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RE: Minister Wants Full Open-Skies Between US-Cana

Wed Feb 09, 2005 6:09 pm

No sane person in the US is paranoid about border issues with Canada. The Bush administration tries to fan the flames of paranioa for political reasons and some people have do-nothing jobs that enforcing border controls, but the general public considers the border controls a nuisance, a waste of money, or a non-issue. And we know that the Bush administration will not extend past 20 Jan 2009.