Over the next few months, Lang Michener`s partner will finally be able to fly directly from his home office to oil and gas customers in Houston on an Air Canada flight. At the moment, this flight involves a tedious transfer to Dallas. Dixon says, “Open skies is a boon for me and other business people. This will take us directly from point A to point B and save us time and hassle. The continent-wide deregulation is part of the expansion of North American routes for Canadian airlines. American Airlines owns 29% of PWA, while Air Canada owns 20% of Continental Airlines of Houston and has marketing relationships with United Airlines. PWA`s Fitch says that “outdoors, we will be able to make the most of our relationship with America.” The United States has made Open Skies with more than 100 partners from all regions of the world and at all levels of economic development. In addition to the Bilateral Open Skies Agreements, the United States has negotiated two Multilateral Open Skies Agreements: (1) the 2001 Multilateral Agreement on the Liberalization of International Air Transport (MALIAT) with New Zealand, Singapore, Brunei and Chile, which was later joined by Samoa, Tonga and Mongolia; and (2) the 2007 Air Transport Agreement with the European Community and its 27 Member States. On November 27, 2006, we formally adopted the Blue Sky policy to conduct negotiations on air transport agreements (ATAs) with countries around the world.

This policy aims to promote sustainable and long-term competition. It also promotes the development of new and expanded international air services for the benefit of passengers, shippers, and the tourism and business sectors. Recalling their commitments at the Conference on Security and Cooperation in Europe to promote greater openness and transparency in their military activities and to enhance security through confidence-building and security-building measures, Air Canada proposed an open skies agreement between Canada and the United States, establishing an unrestricted internal aviation market between the two countries. The airline presented its proposal today in a letter to Canadian Transport Minister David M. Collenette and U.S. Secretary of Transport Norman Y. Mineta. The two countries` current open skies agreement, established in February 1995, provides for third and fourth freedom rights that allow a number of airlines from both countries to operate as many flights between Canadian and U.S. cities as they wish. However, the 1995 agreement differs from the bilateral open skies agreements that the United States has negotiated with more than 50 other countries in that it restricts fifth-freedom rights for passenger and cargo transport operations, the right for all cargo airlines to serve points in the other country on a co-terminal basis, and full route and pricing flexibility for all air service operations.

in particular in third countries. These restrictions were introduced due to Canada`s concerns about the impact of open skies with the United States on the Canadian aviation industry. However, Air Canada said the liberalized policy had benefited shippers and passengers on both sides of the border. Granting sixth-freedom rights would allow Canadian and U.S. airlines to carry each other`s domestic traffic through their respective hubs. Such duties would be consistent with Air Canada`s proposal, which follows Collenette`s statement earlier this week that the government would consider options such as “more foreign competition, modified sixth freedoms or cabotage” as an alternative to regulation to increase competition in the Canadian domestic market. “We need a market-based solution to foster a competitive environment in the Canadian domestic market,” said Robert Milton, President and CHIEF Executive Officer. However, the financial situation remained slightly murky with the debt-ridden PWA, where the strength of the US dollar, rising interest rates, a three-week strike at a regional airline and the temporary grounding of 15 small aircraft for safety reasons last fall resulted in a loss of $38 million for 1994. Yet this is a significant improvement over the $292 million in red ink spilled in 1993. PWA forecasts a profit of $52 million for 1995, a forecast based in part on more flights to U.S. destinations. Drew Fitch, Senior Vice President of Finance at PWA, said, “There are opportunities for us in the open skies, even if we take a slower approach than Air Canada.” The U.S.

open skies policy has gone hand in hand with the globalization of airlines. With airlines` unlimited access to our partners` markets and the right to fly to all intermediate and additional points, Open Skies agreements offer maximum operational flexibility to airline alliances. The Open Skies agreements have significantly expanded international passenger and cargo flights to and from the United States, boosted more travel and trade, boosted productivity, and fostered quality employment opportunities and economic growth. Open Skies agreements achieve this by eliminating government interference in airlines` business decisions about routes, capacity and prices, and by enabling airlines to offer consumers more affordable, convenient and efficient air travel. Canada will continue to negotiate new ATAs and expand existing agreements to advance the interests of Canadian consumers and stakeholders, as well as our trade and tourism sectors. However, even before the Open Skies agreement was signed, Air Canada was flying. It reported a profit of $129 million in 1994, up from a punitive loss of $326 million the previous year. The airline also forecast a profit of more than $100 million for 1995, with plans to add 20 new routes to the United States. .