Tokyo is hoping the new pragmatism demonstrated by Washington on fifth freedom issues with Thailand will carry over into passenger talks it hopes to start in April.

Thai-US negotiators reached agreement on a new bilateral surprisingly fast, thus ending a six year impasse over US fifth freedoms. The main reason this accord came so quickly is that Washington acceded to Bangkok's demands to cap those rights.

Under the new pact, US carriers may operate as many as 31 combination passenger-cargo flights per week, up from the present 14, plus 24 all-cargo frequencies. These flights may pick up or discharge traffic at any intermediate stop, but Bangkok extracted a critical concession that no more than 14 combi or all-cargo flights would stop at any one intermediate point. This limits US carriers to 14 weekly flights on such key fifth freedom sectors as Tokyo or Taipei to Bangkok.

These limits can be reviewed in three years, but they are not part of any phased liberalisation. In its desire to conclude the bilateral, Washington has thus accepted less than its stated goal of acceding to restrictions only in transitional agreements phased towards open skies.

Time will tell whether Tokyo can capitalise on this. Passenger talks are only tentatively scheduled for April, after the current cargo talks conclude. The MoU carriers on both sides - American, Delta and All Nippon - are pressing for structural changes in the bilateral to put them on equal footing with the bilateral carriers: United, Northwest, FedEx, and Japan Airlines.

In an unusually frank speech, All Nippon's president and chief executive officer, Seiji Fukatsu, recently criticised the bilateral for relegating ANA to 'second class carrier' status. He told a Washington audience that the bilateral's 'two-tier ranking of carriers is not seen in any other market in the world.'

The Japanese case may be strengthened by a revised bilateral with Singapore which boosts each country's fifth freedoms and, for the first time, allows joint operations with third party carriers. A Japanese transport official says the provision 'is expected to provide us with a negotiation tool in our talks with the United States.'

Tokyo could find further support for that view in the Thai-US agreement. Washington yielded on fifth freedoms but in return secured codesharing rights for partners United Airlines and Thai Airways, which will be implemented this summer.

And with JAL now planning joint flights with Canadian Airlines, in which American Airlines holds a 33 per cent stake, the prospect of a JAL-American codeshare has moved even closer. American's chairman Robert Crandall has already predicted this will be on the agenda in the next Japan-US passenger talks.

David Knibb

Source: Airline Business