Airline president wants single aviation market with USA

Air Canada is proposing a full open skies agreement between Canada and the USA, creating an unrestricted single aviation market as a way to stimulate competition in its domestic airline industry.

The proposal has been put forward by airline president Robert Milton in a letter to Canada's Transport Minister David Collenette and US Transportation Secretary Norman Mineta.

"We need a market solution as a means to foster a competitive environment in the Canadian domestic market," says Milton. His letter follows an earlier statement by Collenette that Ottawa may have to re-regulate the Canadian airline industry as a means to stimulate competition in a market where flag carrier Air Canada has about an 80% share, following the demise of Canada 3000. The minister also suggested Ottawa might open the Canadian market to foreign carriers.

Milton doesn't believe a competitive environment can be created in Canada with outdated regulations such as limiting the number of carriers allowed to serve a particular market or route, imposing pricing restrictions or nationalising Air Canada.

"For this reason-I have urged the two governments to build on the success story of the 1995 Canada-US Open Skies Agreement to remove all restrictions progressively in order to arrive at a fully integrated common air transport market with the United States," says Milton, who adds that he has spoken to a number of US carriers who are "warm" to his idea. In response, Collenette says Milton has pushed the same proposal for the last two years and that US carriers have not been receptive.

The Canadian flag carrier is preparing to launch a second discount airline to follow on from the launch of its discount carrier Tango, the latter having been seen as a key factor in the demise of Canada 3000.

The second low-cost operation, which is rumoured to be called Zip, was set to launch this month, but has been delayed following the terrorist attacks of 11 September.

There is still no start date for the new carrier which will be based in Calgary and Hamilton, Ontario, but former WestJet president Steve Smith has been appointed to run it. The new airline will fly up to 20 Boeing 737s taken from Air Canada's mainline fleet.

Source: Flight International