'Open skies' talks to begin next month

DEL · Post by **DEL** » Fri Feb 25, 2005 4:23 pm

Interesting what will happen if this goes through.

'Open skies' talks to begin next month
By TERRY PEDWELL

OTTAWA (CP) - Canadians could be boarding American air carriers for flights between Canadian cities within a couple of years.

Canada and the United States have agreed to begin negotiations as early as next month on a new "open skies" treaty.

If a deal is struck, it would mean American airlines could carry passengers between Canadian cities.

At the same time, U.S. domestic air routes would be open to Canadian carriers.

"(Canadian carriers) would love to go into the American markets," Transport Minister Jean Lapierre said after meeting his U.S. counterpart, Transportation Secretary Norman Mineta.

"They're not afraid of competition," Lapierre said Thursday.

"I've got very positive signals from our national air carrier, Air Canada, and also from the Westjets of this world and the others."

Current rules permit foreign carriers to fly in and out of Canada, but forbid them flying between communities in the same country.

The North American air industry has changed since the mid-1990s, says Mineta.

"I think the airlines themselves see larger opportunities," he said at a news conference with Lapierre.

However, Mineta suggested that not all U.S. airlines would want to open themselves to further competition, especially if they're already struggling financially.

"Five of our large carriers are in Chapter 11 (bankruptcy protection)," Mineta pointed out.

"So they're going to be very selective in terms of where they're going to be expanding their operation.

"But it is an opportunity that they'd like to see."

Critics of open skies have argued that Canadian carriers would have trouble competing if large American airlines could fly within Canada.

It's feared they would cherry-pick only the most lucrative popular routes, such as Toronto-Ottawa-Montreal or Toronto-Calgary. Such new competition would hurt domestic carriers, making them less likely to serve smaller communities into smaller cities that already complain they're already underserved.

It's possible an agreement expanding on the current open-skies treaty could be signed within two years, said Lapierre.

"I'm sure," he said, "because I think the political will is there to make things happen."

From: http://cnews.canoe.ca/CNEWS/Canada/2005 ... 24-cp.html

shankdown · Post by **shankdown** » Fri Feb 25, 2005 10:31 pm

Seems to me that this is something we should all be taking up with our MP's. Open skies would be great if US carriers had to hire Canadian pilots if they wanted to fly in Canada, but is there any chance of that happening? Me thinks no. Once the Americans roll in here, there will be no way to get them out. Any chance we can compete in their market against their big-business airline backers? Again, me thinks no. If we all want to be flying for a living 2 years from now, perhaps we should be trying to put a stop to this ourselves. Geez, we're having a hard enough time with our meager number of successful carriers. We don't need them being put out of business, too. Lets start reaching for the panic button.

SD

... · Post by **...** » Fri Feb 25, 2005 11:05 pm

This is not good...as Canadians we should lie down and inevitably swallow this one as well... we always do. We bitch and complain...but thats it... everyone has their way with us...

Why bother having flight schools...it will be useless. With the circus going on at JetsGo...now this...you low timers & new students...give up the dream...you'll never make a respectable wage in a career as a pilot or an engineer...

Soon...even 30K won't get you a job...

Shut'er down ...shut'er all down...

Ryan Coke · Post by **Ryan Coke** » Fri Feb 25, 2005 11:50 pm

I don't know why you guys are so scared of a little competition. The fact is we have a cost advantage due to the lower dollar, and I think our (WJ's and AC's) ability to compete w/ american carriers would be shown to be quite strong.

The problem is I don't see the upside as far as the Canadian traveller is concerned. The fairs can't get any lower, but the customer service would likely begin to drop to the levels of the americans.

I do think that if they did this, that they should get pilots included on the NAFTA list of professions that can work in either country.

Pajock · Post by **Pajock** » Sat Feb 26, 2005 2:23 am

BCASFlyboy, great post! I'm scared to death of what this will do to our industry, only cuz I don't know what it will do to it, or our jobs and lifestyles. But there must be something good to it, as you've pointed out, and hopefully the government will as well, aside from more competition in Canada!!

max diff. · Post by **max diff.** » Sat Feb 26, 2005 5:40 am

I agree that this is a move towards uncertain times, but the change is inevetable. The potential both good and bad is unrecognizable right now. What if this was to make the job border more transparent? So we not only compete with air travel, but in the whole aviation industry together. Would anybody not agree that it would be easier to find a job in a market of 330 million versus 30 million?

Just a thought.

Mike · Post by **Mike** » Sat Feb 26, 2005 7:18 am

doing research and thinking real hard......

i suppose the freight would be loyal as well.

Just a thought

gelbisch · Post by **gelbisch** » Sat Feb 26, 2005 7:57 am

Yeah, I was just going to say... that'd be it for the freight carriers up here. This is all folly, if you ask me.

... · Post by **...** » Sat Feb 26, 2005 9:32 am

Very good contribution BCAS...very well written....

BCASFlyboy wrote: I wrote a paper on this in my transportation economics class a few years back in university, and these are my two cents (couldn't find the paper, so here goes from memory/opinion)

I of course had to leave University to get an education....so here are some of my counter points.

BCASFlyboy wrote: Ultimately if Canada was going to open the skies to foreign carriers ONLY - Cabotage - then it would be a big issue to have the American carriers hire Canadian staff for their Canadian operations. Well, i mean for any foreign carrier really, it is important that there be Canadian staff, making Canadian dollars, paying Canadian taxes. On the flipside, I'm sure logistically and with the unions, it would be a bit of nightmare for the foreign carriers, however, it would be something that would have to be done - a cost of doing business if they wanted to in Canada. Having a foreign company with local workers is called "Right of Establishment"

The system is not set up for this nor will it ever be if the USofA had anything to say about it. They are the driving force...What ever happened to the soft lumber industry...Americans are in violation of many clauses in the Lumber agreement of NAFTA...as a result..many mill shut downs and unemployment rate climbing in that industry...IT'S CALLED PROTECTION OF The AMERICAN ECONOMIC INFRASTRUCTURE.

BCASFlyboy wrote: However, with the reciprocal rights both north and south of the border-Open Skies - there are a number of things to consider. First, the rights will be reciprocal, so Air Canada, Westjet, Canjet, jetsgo, etc. will be able to have their crack at the US market, and vice versa. So in this sense, the argument can be made that everything will balance out staff wise. This will be much more of a boon to our Canadian carriers having access to a 300 million person country versus the Americans now having access to a 30 million person country. I doubt very highly that you would see some of the Majors try and come up and run the Toronto - Calgary, or Toronto - Vancouver services, not when there are already 4 carriers (or will be when CanJet starts these) on the routes.

Overtaking...in time...of 30 million people is easier than trying to over take 300 million...not hard to see who would win that one

Jetsgo in financial trouble operating day by day...WestJet with a 47 Million loss...what kind of financial shape are we to overtake these American carrier giants??? Despite their financial woes as well??

The Minister said the Airlines in Canada want to see Open Sky's...Who is driving this?? I don’t know of anyone that has endorsed it... only Air Canada...? Their Big mistake was voting into deregulation...that’s when 'livin' the dream' ended for them and Canadi<n Airlines...opened the doors for competition against their routes...now...I think they may be cutting their nose to spite their face...

-General thinking of Air Canada, maybe..just my opinion???

"Lets Open our Sky's to get rid of our competition at home...all these discount carriers like the JetGo's and WestJets can be ground into the ground....Yeah..lets do that.."

You think that the income and competition figures created is factual if open sky's happens...it took Canada 17 years to finally show that Free Trade implemented in the late 80's has had a positive impact on Canadians...17 years man!!! And guess what...it accounted for 5% generated overall economical growth...
I'm not that smart of a guy...but it I owned a business and someone came to me with a business plan that showed me that in 17 years....I will finally turn a profit of 5%....what would you say??? I tell them to go phuck themselves!!! After NAFTA was implemented you remember what company was the first to leave this country??? Many here are too young to remember or many here didn't follow this closely in the 80's...Well it was Gillette out of Montreal....to this day I boycott their products because they left (I think) about 1500-2000 Canadians unemployed over night...

BCASFlyboy wrote: Most route pairings in the US only have 1 carrier or 2 going head to head. There aren't a lot of routes that have 4 or 5 carriers going at it (obviously a generality, but true none the less). So as a result, while people might wonder about the job issue, the American carriers will have to hire Canadian ground staff and same with Canadian carriers hiring American ground staff. In terms of pilots and f/a's, well again, considering the better prospects for the Canadian carriers, US expansion will open up more jobs because of a requirement for more aircraft, for more services. Hence there stands to be more Canadian boys and girls getting the call, than there would be under a strict Cabatoge situation where the American carriers only fly in Canada.

I would have to kinda disagree. The only jobs to be had are ground/ramp personnel...the high profile high income jobs will disappear with every Canadian airline that buckles under the weight of the American market.

BCASFlyboy wrote: Personally, I am dead set against foreign cabatoge. If it happens, then I will agree with IamBirdDog's post, however, I am in favour of the full on, RECIPROCAL, Open Skies agreement, that I believe will benefit our Canadian carriers and lead to more growth and more jobs over the long run. At the very least, I would take right of establishment.

The EEC will soon be dubbed 'The United States of Europe'...all those countries banded together and operation under one currency...one flag and one border....(to the outside world)

This Open Sky's will never work here with the way the system is set up.

Canada and the US and our NAFTA agreement will take a back seat to Europe's new economic super power...Unlike them...the way we are set up, Open Sky's will never benefit us as Canadians...and us as aviation professionals.

Change the whole system between us and the States...then go ahead and rip open the sky for all I care...Until then be prepared for yet another round of drastic changes for the worst.

Doom and gloom...whatever...I heard a rumour that now you have to buy an airline job in Canada for 30K...We as Canadians lay down and take it...lets just get it over with and close all the flight schools...it's OVER.

yycflyguy · Post by **yycflyguy** » Sat Feb 26, 2005 11:22 am

So I am not an economics boy but a couple of thoughts pro and con with the Open Skies Agreement:

Con - I believe that the likes of Westjet should be most concerned with companies whom they are modelled after (Southwest). For the same reason that the LCC are successful in the US they would be formidable against Canadian LCC competing for the same niche.

Pro/Con -If a reciprocal agreement is reached it blurs the professional trades line where Canadian pilots are not welcome in the US. I believe that you would see pilots added to NAFTA to accomodate US pilots working for US companies in Canada... although it may open things for Canucks to head south.

Pro - Cheaper fuel in the US due to lower taxation

Pro - potential 300 million person market

Pro/Con - Just because US carriers can compete in Canada does not mean that it is advantageous to do so

So, Like NAFTA this will most likely not be a good thing but not necesarily a bad thing either.

corn-shoot · Post by **corn-shoot** » Sat Feb 26, 2005 12:07 pm

This entire industry needs an enema, and I think this may be the means to do it.

phatboy · Post by **phatboy** » Sat Feb 26, 2005 12:10 pm

I think this is great....its will give people more choice and the fares will be much lower.....competition is good.....you will see the Canadian companies get better....they will have to in order to compete.....bring em on

peeelot · Post by **peeelot** » Sat Feb 26, 2005 9:09 pm

I think this could be a good or bad thing. The carriers from the states would pay the canadian pilot in canadian and that makes a huge diff in the pocket book. So I am all for it Just as long as they employ cCanadian pilots

Aces High2 · Post by **Aces High2** » Sun Feb 27, 2005 8:47 am

We should all get one thing straight. Open skies does not mean we as Canadians (Pilots) can work for American carriers. One of the hurdles that the Americans have to go through is the Unions. ALPA is dead set against any sort of cabatoge. I have read many different studies on this issue and the stae of our industry right now will not far well with an agreement like this. It is also pretty interesting to note that our former Bloc Transport Ministers( yes he was a sepratist) riding is in Montreal where two of the biggest areospace companies in the country are located. He is trying to create a legacy for himself, because he may not be in the position for very long. We have to remember we have minority government.

EI-EIO · Post by **EI-EIO** » Sun Feb 27, 2005 10:15 am

The Yanks always want their own way or no way. This has been clear with NAFTA and american companies suing canadian provinces for trying to regulate and imposing illegal duties on softwood etc., never mind the beef border closure rescinding the single beef market.

Canada should look east and west, and concentrate on deals with the EU and Asia. Who is looking for this anyway? If it's the Americans, then Canada should insist on advantageous and *easily enforced* provisions, or just let the status quo stand.

Cod Father · Post by **Cod Father** » Sun Feb 27, 2005 9:00 pm

Jean La Pierre would be doing something if he lowered airport rents or eliminated them! I hate paying a user fee to pass through terminals because the Airport authorities are renting the property from TC.

LH · Post by LH » Mon Feb 28, 2005 7:30 pm

(1) Anyone can check if they don't agree or don't believe, BUT when NAFTA negotiations were taking place representatives of the Canadian aviation industry were asked to attend for their own benefit...........and they refused. There have been on-going negotiations in recent years and at this time to include us in NAFTA, but nothing yet. So if anyone thinks we weren't asked or given warning......guess again.

(2) American aviation companies pay 22 1/2% LESS for their American-made parts than the companies in Canada do, so be careful about talking about the lower Canadian peso and the advantage that gives us because that 22 1/2% just about makes up the difference

My personal view on all the rest? In this particular area we can take the US carriers on and do just find without anyone's throat being cut. I don't fear the Americans one little bit and all the brains, ability and money isn't centered south of the 49th parallel. We'd do just fine and it would help us get over our infernal national inferiority complex with regards the Americans. Money?....someone please check who the 3rd richest person in the world is according to Forbes magazine and where he lives and what all HE controls in the Excited States of America.

minni-me · Post by **minni-me** » Wed Mar 02, 2005 9:05 am

As a Canadian working for a large US carrier, I DO NOT think this is a good idea, AT ALL!! I think it will kill almost all larger freight carriers that fly major city to major city in Canada, will most definately destroy WestJet, and will severely hurt Air Canada.

These are my opinions, I could be, and hope, I am wrong if this happens.