Open skies a plus-plus for
China, US By Thomas H Wilkins
Any discussion
about "open skies" begins with the assertion of a
state's sovereignty. A state must be respected for
its actual and rightful control over all air space
within its territorial borders. Failure to
recognize these rights and to obtain prior consent
leads to a violation similar to trespass.
Open-skies agreements give both countries
unrestricted landing rights and make obsolete the
granting a fixed number of flights per week to a
fixed destination. One such agreement between the
US and the European Union came into effect this
week, but there is none between the US and China.
China has agreed to increase the number of
flights between the countries. As of now, 12 daily
passenger flights leave the US headed for China.
One of these is Delta Airlines' direct flight
from
Atlanta, which arrived in
Shanghai recently with the state's governor and a
delegation team looking to expand business between
the countries.
The current agreement
between China and the US will add four more
flights in 2009. According to US Department of
Transportation spokesman Bill Mosley, the selected
carriers for 2009 are US Airway, North West
Airlines, American Airlines and Continental
Airlines. Three new flights from the US will be
added in 2010, two in 2011 and two in 20012. The
two countries have agreed to meet by 2010 to
discuss full open skies.
Chinese flights
from China to the US are much less frequent, with
only three daily flights, two by Air China and one
by China Eastern. Air China has another flight
five times a week, China Eastern has another
flight four times a week and China Southern has a
flight five times a week. In total there are only
six separate departures a week, not all of which
are daily, coming from China to the US. So
depending on your math, the US has twice as many
flights as China.
An open skies agreement
between China and the US could offer economic
gains to both countries. Last year, the Department
of Transportation said a single daily flight by a
wide-body jet from the US to China would add an
estimated economic activity in China along the
lines of US$213 million annually. Chinese carriers
have a different view and do not seem to be in a
hurry to liberalize traffic.
When and if
open skies come to China-US flights, here is a
picture of what can happen. The other day, Air
France-KLM left the United Kingdom for Los
Angeles. Recently, Continental Airlines landed in
Heathrow. Previous to the onset of open skies,
these airlines were prevented from operating to
Heathrow, a key port for international
connectivity. Before this, the prized routes were
given only to British Airways, Virgin Atlantic,
United Air Lines and American Airlines. This
change destroys the concept of limiting the number
of flights and who may fly where.
Now the
philosophy is to allow as many flights as the
market will bear. It means any European Union
airline can fly from any EU destination to the US.
The old system permitted only flights from the
host country of the airline. Now any EU airline
can fly anywhere in the US and vice versa. One
caveat in this liberalization is the limitation
caused by costly landing slots. Time will tell if
increased competition will lead to cheaper
tickets.
The Delta flight is significant
to Chinese travelers because they will be landing
in the world's busiest airport. This increases the
connectivity to Europe and South America, where
China is developing new business relations. The
flight also reduces the changing of planes in
Tokyo, Seoul or Hong Kong. Furthermore, Atlanta
Airport is building a $1.5 billion international
terminal, which will increase the number of
international gates at the airport to 40.
Thomas H Wilkins is
chief executive manager for Joseph Jekyll Advisers
LLC, an investment advisory firm in Athens,
Georgia, USA.
(This article first
appeared in ChinaStakes.com. Used with
permission.)
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