LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

U.S.-China Open-Skies Deal Remains Elusive

Wed May 02, 2007 6:35 am

U.S.-China Open-Skies Deal Remains Elusive Despite Talks
05/01/2007

The latest round of aviation talks between Chinese and U.S. government officials did not yield the open-skies breakthrough the U.S. was hoping for, although there is still hope that a new agreement can be reached before this month's Strategic Economic Dialogue in Washington.

U.S. Transportation and State department negotiators were in Chengdu, China, late last week in the third round of aviation liberalization talks to be held this year. Hopes were high that the Chinese would agree to a timetable for removing limits on U.S. commercial flights following productive discussions between Transportation Secretary Mary Peters and Chinese Aviation Minister Yang Yuanyuan last month; however, the latest Chinese proposals fell far short of U.S. expectations.

Major U.S. airlines are eager to increase their access to Chinese airports, but the current bilateral aviation agreement places strict limits on flights, with gradual increases through 2010. The U.S. goal is a transition to full open skies, but the Chinese government and airlines are reluctant to allow more U.S. flights due to the difficulties Chinese carriers face in competing on U.S.-China routes.

But in the recent Chengdu round, Chinese negotiators would agree only to a slight increase in annual flight awards for U.S. carriers through 2011. Sources say they were open to setting a date for talks aimed at full open skies to begin, but are not willing to set a deadline for an actual agreement to be reached.


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http://www.aviationweek.com/publicat...Deal+Remains+Elusive+Despite+Talks
From the desert to the sea, to all of Southern California
 
B2443
Posts: 586
Joined: Sat Jul 03, 2004 2:28 am

RE: U.S.-China Open-Skies Deal Remains Elusive

Wed May 02, 2007 10:57 am

Quoting Laxintl (Thread starter):
The U.S. goal is a transition to full open skies, but the Chinese government and airlines are reluctant to allow more U.S. flights due to the difficulties Chinese carriers face in competing on U.S.-China routes.

Maybe the U.S. airlines can help their code-shared Chinese counterparts make money on the routes, in addition to banging their heads on DOT to negotiate for more rights....UA helping CA, AA helping MU and NW helping CZ. The sooner they make money, maybe the sooner UA/AA/NW/CO/DL/US will get more rights.
 
UnitedFirst
Posts: 451
Joined: Mon Jun 11, 2001 12:16 pm

RE: U.S.-China Open-Skies Deal Remains Elusive

Wed May 02, 2007 12:37 pm

If the US government actually thinks they will be able to form an Open Skies agreement over the coming months, it can be explained only by a gross disregard for the current state of the market. Neither CZ nor MU announced profitable first quarters, while CA's profit has been attributed in no small part to the investment/cooperation with CX/Swire. (Furthermore, earnings for 2006? CZ: US$24million / MU: (loss: $360million) / CA: $411million).

Additionally, while the US airlines can't chew up enough of the presently tiny US-China market, the Chinese airlines are currently decreasing service – a good example is MU on the PVG-JFK route (4xwkly to 3xwkly, if I recall).

Anyone with even a basic understanding of Chinese history can understand why the government has a vested interest in protecting its national airlines, especially in the face of fierce US competition.

Quoting B2443 (Reply 1):
Maybe the U.S. airlines can help their code-shared Chinese counterparts make money on the routes, in addition to banging their heads on DOT to negotiate for more rights....UA helping CA, AA helping MU and NW helping CZ. The sooner they make money, maybe the sooner UA/AA/NW/CO/DL/US will get more rights.

I think this is possible. As we see further improved service (not to mention consistency of said service) by Chinese airlines, better marketing in association with their US partners & respective alliances, and (hopefully) US respect for how the Chinese want to open up the market, one day we may see liberalization. However, the US is pushing too hard too soon.
 
Flighty
Posts: 7649
Joined: Thu Apr 05, 2007 3:07 am

RE: U.S.-China Open-Skies Deal Remains Elusive

Wed May 02, 2007 1:50 pm

China has granted these meetings as a meaningless gesture. It is an opportunity for China to act patronizing to the American delegation and send them home empty handed. It makes China appear in control and powerful to conduct such charades. The US is not well informed about Chinese policy -- mainly headed by the clueless Hank Paulson. His philosophy is, lick Chinese boots. And he has gotten absolutely nothing from China -- nothing -- from his brilliant tactics. Nor will he get anything.

If I were China, I would continue these negotiations as long as possible. Perhaps 4 to 5 years, off and on. It provides amusement for some of China's several million government officials. Harmless. But, not news material either.

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