Japan Airlines has fired the opening shot in expected Japan-US aviation talks by calling for cancellation of the existing bilateral so that both sides can start with a clean slate. With talks imminent, JAL is signalling its determination to urge a harder line that is consistent with Tokyo's growing resistance to US pressure on other issues.

Speaking at an Airline Business conference in Singapore, JAL's vice president corporate planning, Koki Nagata, said: 'Clearing the air with a completely new agreement could create a better working system than the present.' Cancellation is a dramatic act, he said, 'but when all else has failed, it may be the right step to take.'

An informed source suggests that Nagata's statement was approved in advance by JAL's chairman and Japan's Ministry of Transport. But cancellation would be a decision made in consultation with a number of Japanese ministries.

Citing now-familiar statistics about US fifth freedom traffic within Asia, Nagata warned that the competitive ability of Asian carriers would continue to suffer from this US 'invasion of Asian skies.' He pointed to what he saw as a common conclusion by the Clinton commission, Europe's comité des sages and Japan's own 'wise men' advisers that every market should have its own competitive airlines.

Edward Oppler, senior US negotiator and deputy director in the DOT's Office of International Aviation, denied Washington was intransigent. 'The US recognises that it enjoys substantial fifth freedom rights in Asia.' Oppler complained that Japan had consistently rejected US offers of 'open beyonds' to Japan's carriers. Criticising Tokyo for attempting to impose fifth freedom caps on US flights, he warned: 'We don't take kindly to that.'

Oppler stressed he did not see the inclusion of a dispute settlement mechanism as a workable solution, although he conceded that in the recent Canada bilateral the US had agreed to lengthy dispute settlement procedures.

Acknowledging that fifth freedom rights were possibly 'the largest irritant in the US-Japan aviation relationship', Oppler also revived the debate about whether Japanese sixth freedom traffic across the Pacific balanced US fifth freedom traffic within Asia.

But he stressed any imbalances would better be addressed through codesharing and other cooperation than through capacity controls. Implying that the US might accept interim controls, he pointed to the role of the transitional agreements in the US-Canada bilateral.

But the key dispute is whether talks start with the current bilateral or ab initio. Oppler stresses that the US wants existing rights recognised. JAL's response is that 'after 20 years of attempts to renegotiate, [cancellation] might be the best option.'

Source: Airline Business