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"Open Skies" Coming?

Publisher:  Connexions Information Sharing Services, Toronto, Canada
Year Published:  1991  
Resource Type:  Article

Abstract:  Federal Transport Minister Doug Lewis has announced that the Progressive Conservative government intends to negotiate what it calls an "open skies" agreement with the United States. However, what the government is in fact proposing is a bi-lateral aviation deal with the United States, not a general international "open skies" arrangement. The intent is to bring about further deregulation of the airline industry, eliminating all remaining government-imposed restrictions except those related to safety. The government's intentions were criticized by PWA president Rhys Eyton, who said unlimited competition with the U.S. carriers could destroy the Canadian airline industry and shift thousands of jobs to the U.S.. Equally critical was the CAW union, which represents many aircraft workers. According to the CAW, "'open skies' is more likely to lead to a reduction in the number, size, and scope of Canadian air carriers." CAW president Bob White said that "In a country as vast as Canada, strong national links in transportation are essential. Canada-U.S. free trade in airline service would do just the opposite. It would enhance north-south relations at the expense of our national links." The CAW points out that U.S. airlines enjoy significant cost advantages, including lower interest costs on debts to finance aircraft and lower fuel costs. The sheer size of the major American carriers also gives them significant economies of scale, while their control of take-off and landing slots and airport gates enables them to keep potential competitors out of their own markets.
Source: Canadian Tribune and CAW. (Canadian Tribune subscriptions are $20/year from 290A Danforth Ave., Toronto M4K 1N6).

This item appeared in Issue #53 (January 1991) of the Connexions Digest.

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