US Aims For 'Open Skies' Deal With Japan By End Of 2009
September 11 2009 - 4:08PM
Dow Jones News
U.S. and Japanese officials agreed to meet again next month
about further deregulating commercial travel between the two
countries, with the U.S. aiming for a tentative "open skies" treaty
by year end.
One factor driving the talks: A push by Japan's All Nippon
Airways Co. (ALNPY) to win approval of U.S. antitrust
regulators.
Negotiators from the two countries concluded a round of talks
Friday aimed at updating a 1952 agreement that liberalized air
travel over the Pacific Ocean. The talks are focusing in part on
traffic at Tokyo's two major airports, Narita and Haneda.
But serving as a backdrop is All Nippon's desire to fully
operate within the Star Alliance of air carriers, negotiators said.
The airline must first obtain antitrust immunity from the U.S.
government, but U.S. policy limits antitrust exemptions to airlines
from countries that have an "open skies" agreement with the U.S.,
said top U.S. negotiator John Byerly of the State Department.
"ANA has a very strong interest" in obtaining antitrust
immunity, Byerly said. "That's led the Japanese government to be
willing, as it has not been in the past, to consider 'open
skies'."
Yoshiro Funabiki, counselor of transportation at the Japanese
embassy in Washington, said All Nippon's interests are a factor in
the "open skies" talks, but not "the sole and main motive."
D.C.-based representatives of All Nippon couldn't be reached for
comment.
Funabiki said Japan is serious about reaching an "open skies"
agreement but that the country remains concerned about U.S.
dominance in the trans-Pacific market. Those concerns are rising as
Narita prepares to expand the number of flights there next
year.
"The U.S. has too much dominance in market share across the
Pacific ocean, and too much dominance especially in Narita," he
said.
U.S. carriers currently operate a quarter of the flights coming
in and out of Narita, Byerly said.
Under the current treaty between the U.S. and Japan, carriers
that can fly between Narita and U.S. cities are: Delta Air Lines
Inc. (DAL), UAL Corp.'s (UAUA) United Air Lines, and FedEx Corp.
(FDX) in the U.S.; and Japan's two biggest airlines, Japan Airlines
Corp. (JALSY) and All Nippon.
Byerly said the two sides this week "made progress in developing
the outlines of a new agreement text," but added "there's still a
good bit of work to do."
The two sides will hold another round of talks in Tokyo starting
Oct. 26, Byerly said.
The U.S. is also in talks with the European Union on expanding
an "open skies" pact that went into place in 2008. Those talks are
scheduled to resume this autumn. Byerly said the U.S. aimed to have
an updated agreement with the E.U. by the end of 2010.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com
(Doug Cameron contributed to this article.)