Canada and the USA reached an open skies pact in mid-November just months after agreeing to negotiations, but the deal does not allow full rights to fly services beyond or within national borders, nor does it address cross-border investment and ownership issues.
The liberalisation follows a visit to Ottawa last February by US transport secretary Norm Mineta, who agreed with counterpart Jean Lapierre that the time had come to update the 1995 agreement that liberalised many regional services but fell short of the broader freedoms. The new pact does not envision any form of cabotage, which both sides agreed to keep off the agenda.
Some say the pact’s greatest advance is that it allows more fifth-freedom rights, and Canadian and US cargo carriers will value full rights to “co-terminalise”. The Canadian industry is welcoming the pact, says Mike Tretheway of Vancouver-based transportation consultancy InterVistas.
The pact will advance Air Canada’s plans to use US points to support a growing Canada-Latin America network, says Tretheway, who suggests the new fifth freedoms could lead to a Europe-USA low-cost service. Tretheway, who has advised the federal government on aviation, says: “Using eastern Canada points such as Halifax to add traffic and refuel a transatlantic low-cost carrier could well emerge in five years or so.”
The pact will not become effective until September 2006. However, this delay may help Canada’s largest carrier if it moves toward a closer relationship with Star Alliance partners United Airlines and US Airways. Air Canada could use its immunity bid to exert political pressure on parliament not to block the treaty, say observers.
However, customs and immigration issues remain an increasingly contentious issue between the two major trading partners as the USA places restrictions on Canadian visitors, while Canadian authorities demand full clearance for many transit passengers, as well as others who have long been able to enter without major formalities.
Canadian airport groups say the nation’s airport rents policy, despite recent minor modifications, may deter airlines from using points such as Toronto, even though it would seem a natural beneficiary of liberalisation. ■
Source: Flight International
