Newest Open Skies Proposal - NAFTA style

PreContact

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http://usinfo.state.gov/xarchives/d...07&m=June&x=20070608184507JMnamdeirF0.3027918

08 June 2007
Plans for Open North American Aviation Market Inch Forward

Policy differences make reaching trilateral deal challenging
By Andrzej Zwaniecki
USINFO Staff Writer


Washington – Sometime over the next the decade – but likely not in 2007 or 2008 -- Air Canada could be competing with U.S. carriers on the New York-Paris route and Aeromexico might be launching flights between Los Angeles and Toronto.
This vision for an open North American aviation market inched a bit closer in April when the United States, Canada and Mexico announced a plan to work toward establishing a trilateral open skies agreement, according to U.S. officials.
“We have an opportunity to set a new global standard for free and open transborder air travel, and bring greater convenience and lower prices to shippers and travelers who want to reach places like Tucson, Toronto or Torreon,” U.S. Transportation Secretary Mary Peters said after meeting her counterparts from Canada and Mexico in Arizona where the announcement was made. (See full text.)
A U.S. Department of Transportation (DOT) official told USINFO that the process leading to a trilateral deal will be challenging but the potential rewards are substantial. The declaration signed at the trilateral meeting calls for expanding aviation relationships over the next 10 years.
“The most significant piece of this document, in my opinion, is the vision for reaching a Trilateral Open Skies agreement between our three countries within the next 10 years,” said Peters.
The three countries hope that an open regional aviation market will help them accommodate the expansion of trilateral trade and tourism accelerated by the North American Free Trade Agreement (NAFTA).
Negotiating civil aviation agreements is a complex effort, experts say. Even bilateral aviation deals are difficult to reach because of competing interests of each country’s airlines, national security considerations and other issues. For example, the United States and the European Union signed an open skies agreement in March 2007 only after several earlier attempts to liberalize the trans-Atlantic aviation market had failed. (See related article.)
The differences among the three governments’ respective aviation policies might make future negotiations to open the aviation market in North America particularly difficult. It is anticipated that the first step toward a trilateral agreement will be for the U.S. and Canadian governments to negotiate separate bilateral aviation liberalization deals with the government of Mexico. The United States and Canada concluded an open skies agreement in November 2005. (See related article.)
Negotiations involving all three countries would have to address a number of important issues such as routes, user charges and fees, pricing, advertising and sales, and a uniform dispute resolution mechanism, according to the DOT.
A bilateral open skies agreement gives airlines in both countries the right to operate air services from any point in their country to any point in the other, as well as to connect those flights to points in third countries. A trilateral deal would make it much easier for Canadian, Mexican and U.S. airlines to provide service to any of the three countries and to connect that service to different destinations from any point in North America.
The three aviation markets are quite different, according to experts. The United States, with many airlines, is a large, mature and competitive market. The similarly mature Canadian aviation sector is smaller and dominated by one large carrier – Air Canada. The Mexican market, where far more passengers travel by buses than by planes, is dominated by two airlines, one still state-owned.
U.S. carriers are eager to fly more people to popular tourist destinations in Mexico, according to experts. Under an existing but narrowly focused bilateral agreement, only three airlines from each country can serve routes between any U.S. city and 14 Mexican destinations. So the competition among U.S. airlines for Mexican routes is fierce and pressure to open the Mexican market strong, experts say.
But, says David Bond, a staff writer for Aviation Week and Space Technology magazine, in the near future, that government would have a difficult time persuading Mexican carriers to support any international market liberalization scheme.
Few Mexican carriers have any international experience and most focus solely on the domestic market, Bond told USINFO.
They don’t “feel any urge for open skies,” he said.
In 2005, the Mexico’s government decided to privatize two state-owned airlines - Aeromexico and Mexicana - and allow several budget airlines to enter the market. In November 2005, the hotel chain Grupo Posadas purchased Mexicana. Since then, some budget carriers have experienced strong growth creating uncertainty about how to proceed with the privatization of Aeromexico, according to experts.
It may take time before the shake-up produces more competition, the DOT official told USINFO.
But once it happens, Mexico’s government might be more willing to move forward on an open skies deal, experts say.
 

Rez O. Lewshun

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While we are argueing over Age60, Open Skies will sneak by with its noisy steam rollers and flatten us all....

Better get informed and activated.. Counting on the the Elected leaders that you probably didn't vote for isn't the way to protect your career....
 

Rez O. Lewshun

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United States Hails Aviation Pact with EU as Win for Both Sides

Chief U.S. negotiator views it as a harbinger of further liberalization
By Andrzej Zwaniecki
USINFO Staff Writer


Aviation agreement will allow U.S. and EU airlines to fly between those countries with no restrictions. (© AP Images)


Washington – An aviation agreement between the United States and the European Union (EU), just endorsed by EU transport ministers, goes a long way toward liberalization of the trans-Atlantic air services market, U.S. officials say.
The Bush administration has welcomed the unanimous March 22 decision of 27 EU transport ministers to approve the draft U.S.-EU open skies agreement, which will deregulate the largest aviation market in the world. Air traffic on trans-Atlantic routes represents 60 percent of the global aviation market.
“Tearing down regulatory barriers allows us to foster more affordable and convenient air travel and gives our airline industry more opportunities to compete, innovate and thrive,” said U.S. Transportation Secretary Mary Peters in a prepared statement.
Deputy Assistant Secretary of State John Byerly hailed the pact as a “major breakthrough in trans-Atlantic relations.”
It “is an example, and we hope a harbinger, of what the EU and U.S. can accomplish, working together to achieve market liberalization on an unprecedented scale,” he told reporters during a teleconference.
The deal will allow U.S. and EU airlines to fly between any city in the EU and any city in the United States with no restrictions on the number of flights, aircraft, routes or prices. It also will open to competition London’s Heathrow Airport, where landing rights have been restricted to two British and two U.S. carriers. In addition, EU investors will be able to own and control air carriers from almost 30 countries outside the EU that have open skies agreements with the United States and fly passengers between U.S. destinations and the nine non-EU members of the European Common Aviation Area.
The open skies pact is expected to lower airline fares on trans-Atlantic routes and almost triple the number of passengers on trans-Atlantic flights over the next five years, according to a study for the European Commission.
Byerly said Irish state-owned Aer Lingus may be one of the first beneficiaries of the deal because a special provision on Irish airlines will enter into force immediately when the pact is signed.
Aer Lingus plans to increase the number of U.S. cities it serves from four to perhaps 15, according to press reports.
SECOND PHASE CAN FURTHER DEREGULATION
U.S. and EU representatives initialed the agreement on March 2 after four years of negotiations. (See related article.)
Byerly said the administration is ready to sign it April 30 during the U.S.-EU Summit in Washington. If this happens, the accord will be implemented provisionally, but fully, on March 30, 2008, as requested by EU ministers, he said. Formally, the accord will enter into force when signatory countries meet certain ratification conditions.
Byerly, who negotiated the agreement, said he does not expect any opposition to the deal from the U.S. Congress.
“It is simply too great an agreement to oppose,” he said. “I am enthusiastic about selling what we have done here as a huge accomplishment to Congress, airlines, labor representatives and consumers.”
As an executive agreement, the open skies pact does not have to be approved by Congress. But when U.S. and EU negotiators agreed in 2005 on the first draft of the deal, some lawmakers acted to stop the administration from meeting an EU request to scale back U.S. restrictions on foreign investors’ control over U.S. airline operations. That proposed change, viewed by EU officials as a condition for the deal to go through, later was withdrawn.
Instead, U.S. negotiators offered to allow EU investors, on a case-by-case basis, to hold more than 50 percent of a U.S. airline’s total equity – voting and nonvoting stock combined – without removing the current 25 percent limit on voting stock. Together with other “enhancements,” the offer led to a breakthrough.
Still, officials from some EU countries have expressed disappointment, saying the deal does not give EU carriers as many benefits as U.S. airlines. That view was contested vigorously by Byerly. In concession to critics, EU transport ministers decided to allow the governments of EU members to suspend traffic rights for U.S. carriers if agreement is not reached by 2010 on a second-step accord.
Byerly played down the significance of the EU exit procedure. He said termination provisions are a “standard fare” in aviation agreements.
EU carriers long have sought the right to make connecting flights between U.S. cities and relaxation of U.S. ownership law, the issues they hope to address during the second phase of negotiations, according to press reports.
Byerly said the two sides have not yet agreed on the content of that phase, scheduled to begin 60 days after the first-step agreement is applied.
But he said he hopes U.S. and EU negotiators will be able to tackle “some big issues” as the United States is committed to pursue those negotiations “in absolute good faith and in the spirit of cooperation.”
It is going to take some time, however, he said, “to build consensus among stakeholders as well as Congress to see what we can do.”
The full text of Peters' statement is available on the Transportation Department Web site.
A fact sheet on the U.S.-EU open skies agreement is available on the State Department Web site.
(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
 

Howard Hughes

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Mergers will happen and will help short term. Long term the business of being an airline pilot is not worth it. The schedules are already bad. I'm a republican but can tell you this administration is short sited. All they can think is what will give the public cheaper tickets right now. Irreparable damage will occurr as other countries come in and damage the profession even more than the Walmartization that has occurred via Southwest (not based on pilot pay but ticket prices and cattle operation mentality), Skybus, JetBlue, etc. Its unbelievable the number of attacks to the job/profession right now with age 65, open skies, this deal, Skybus, no ability to strike, paycuts and work rule changes from 911. Sad times.
 

Heavy Set

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As profits increase, slowly you guys will get back some of what you lost. All is not lost. There will still be laws protecting our airlines against foreign interests (due to MAC allowance for War time), and Aeroflot will not fly between LA and LAS. Not likely. Our airlines in the States will have to find their own opportunities and compete, and if Air Canada wants to try New York to Paris, let them try. Delta or American will fly from Toronto to Sao Paulo and beat them at their own game. The sky isn't falling, yet.
 

FlyBoeingJets

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I'm a republican but can tell you this administration is short sited...

Its unbelievable the number of attacks to the job/profession right now with age 65, open skies, this deal, Skybus, no ability to strike, paycuts and work rule changes from 911. Sad times.
Republicans support the small businessman and middle (upper?) management types.

Many professionals not in those groups have taken a beating. A few have escaped (FedEx, UPS and others at the few really successful companies). With the number of companies that have gone BK or seen trouble, the number who have taken cuts or lost their jobs is much higher.

We are going to He11 in a handbasket but at least we are making good time.
 
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Flopgut

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I don't understand how this is considered such a great idea. Why don't they support this same sort of vision for prescription drugs and other pharma products? Convienent, competitive and liberal trilateral medications arrangements sounds like a more important thing than lowering the cost of already cheap airline tickets?!

I swear, we work in the most hated industry there is.
 

Jmoney

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Ahhhhhhhh!!!!!!!!

This is going to KILL US!!!!!! Getting Juan and Paco to fly across the border for $7.25 per day is going to absolutely kill this industry. We are already seeing this crap get started with the trucking indstry! They just now have started letting OTR guys come in from Mexico and drive all over the place. No training, no safety standards, etc. I sure hope this doesn't happen with the airlines!!!!!!
AHHHHHHHH!!!!!!!
 

SDF2BUF2MCO

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While we are argueing over Age60, Open Skies will sneak by with its noisy steam rollers and flatten us all....

Better get informed and activated.. Counting on the the Elected leaders that you probably didn't vote for isn't the way to protect your career....
Well that may be true but if the recent amnesty "deals" are any indication the politicians from both sides are going to do what ever government and commerce want them to do. Both parties supported the NAFTA deal. Unless there is a Boston Tea Party mindset and action (which probably won't happen) the polticians will do whatever they want.
 

anewunion

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Calm down everyone.

#1. There is no money to be made in the domestic market. Trust me, no smart airline would come into the U.S to fight for such a junk yielding ticket.


#2. There is already a bunch of LCC's from the EU traveling to the U.S everyday. Stand in the termial at SFB, you will see thousands of people waiting to fill some very Heavy-type airplanes back to the EU.


#3. There is no more space to park. Where would they go? Not any major airport in the U.S, everything is full.


#4. Nobody is going to surf the internet in germany for the lowest ticket. They are going to go with the brand that they know, or at least can spell.
 

roadrunnerblue

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Calm down everyone.

#1. There is no money to be made in the domestic market. Trust me, no smart airline would come into the U.S to fight for such a junk yielding ticket.


#2. There is already a bunch of LCC's from the EU traveling to the U.S everyday. Stand in the termial at SFB, you will see thousands of people waiting to fill some very Heavy-type airplanes back to the EU.


#3. There is no more space to park. Where would they go? Not any major airport in the U.S, everything is full.


#4. Nobody is going to surf the internet in germany for the lowest ticket. They are going to go with the brand that they know, or at least can spell.
Don't be too sure of that:

Ryanair, Easyjet are making a killing in Europe with EUR 10/ticket prices, while BA and LH are on the defensive (AF/KLM still doing well). All the while flying to secondary/tertiary airports. This is coming to the US and all the crowded airports here will be avoided by them in favor of under-utilized ones around major cities. Trans-Atlantic they will go soon with EUR 10/ ticket prices OK maby EUR50, but it will come and get us eventually, thanks to our wonderful incompetent and clueless politicians who are squandering away the nation's profitable enterprises for the sake of political correctness.
 

SDF2BUF2MCO

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Don't be too sure of that:

thanks to our wonderful incompetent and clueless politicians who are squandering away the nation's profitable enterprises for the sake of political correctness.
PCness is only the tip of the iceberg. I think it has to do with a consolidation of power in which both government and commerce benefit (especially those who are "controlling" the game). To borrow an old line, the politicians are peeing on us and telling us it is raining.
 
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SNOWBUM

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times are ripe for the revolution of the proletarians....


or maybe not, we are pilots,we are proletarians and most don't know it. most of us ( not me) vote republican because "we all know" is more important to stop gay marriage and stop teaching evolution than to have a good paying job, have strong unions, universal healthcare and reducing the debt.:rolleyes: you get what you vote for.
 

Draginass

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Small countries are salivating for the opportunity to come into the US market. Flags of convenience (like tramp steam freighter) and cheap crews and marginal aircraft. The FAA can't even monitor US industry effectively, much less junk flying in from overseas. Good airlines from small EU countries can expand like crazy, way outside their proportional market share.

Just like they want to do with Immigration Reform, the Dems and Reps will say the the oversight will be tight, but we all know that's a laughable lie and the real story will be it becomes a virtually unregulated free-for-all.
 

Rez O. Lewshun

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times are ripe for the revolution of the proletarians....


or maybe not, we are pilots,we are proletarians and most don't know it. most of us ( not me) vote republican because "we all know" is more important to stop gay marriage and stop teaching evolution than to have a good paying job, have strong unions, universal healthcare and reducing the debt.:rolleyes: you get what you vote for.
Ahh yes, but Air Line Pilots think they are part of the social elitist of America. They support 10% ultra rich who have clevery convinced Air Line Pilots that they are one of them all while keeping the 10% exclusive of Air Line Pilots.
 

whymeworry?

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http://usinfo.state.gov/xarchives/d...07&m=June&x=20070608184507JMnamdeirF0.3027918

08 June 2007
Plans for Open North American Aviation Market Inch Forward

Policy differences make reaching trilateral deal challenging
By Andrzej Zwaniecki
USINFO Staff Writer


Washington – Sometime over the next the decade – but likely not in 2007 or 2008 -- Air Canada could be competing with U.S. carriers on the New York-Paris route and Aeromexico might be launching flights between Los Angeles and Toronto.
This vision for an open North American aviation market inched a bit closer in April when the United States, Canada and Mexico announced a plan to work toward establishing a trilateral open skies agreement, according to U.S. officials.
“We have an opportunity to set a new global standard for free and open transborder air travel, and bring greater convenience and lower prices to shippers and travelers who want to reach places like Tucson, Toronto or Torreon,” U.S. Transportation Secretary Mary Peters said after meeting her counterparts from Canada and Mexico in Arizona where the announcement was made. (See full text.)
.
The price of an average airline ticket has risen 45% since deregulation in 1979. Meanwhile, gas is up 400%, college tuition up 638%, housing on the coasts up 1000%

How low do they want ticket prices to go? Free? The fact is, this business is not sustainable with this kind of competition. No other business in the world suffers from the same destructive competition tactics, coupled with such huge operational expenses, as our business.

Think age-65 is a problem for us? Wait until open skies and cabatoge hits our profession. We're in for the roughest ride of your life when that happens. Get your financial house in order now.
 

SNOWBUM

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I think it is pretty clear all of us ( proletarians) in the developed world need to start a new First International. It was quite effective.
 
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