Many Washington aviation officials believe Federico Peña's November tour of Asia was more show than substance, with Peña signing agreements already negotiated. However, one development has been a long time in coming.

Thailand renounced its US bilateral in 1990, the result of what Bangkok felt was an overabundance of US capacity. Though there have been several exploratory rounds since, US negotiators have seen the Thai approach as negative and unproductive.

No longer. In mid-December the US and Thailand were scheduled to sit down and renegotiate their bilateral, with both sides predicting success. The probable outcome will be a 'fairly liberal' agreement, one source says, with fifth-freedom traffic, a phase-in period for frequencies, and capacity controls linked to traffic levels.

Thailand has been brought back to the negotiating table by the confluence of several factors. First, the capacity problem has been defused because United has cut its weekly frequencies to Bangkok from 14 to seven, and Delta has abandoned the market - and the region - altogether. The second reason derives from the first: Thailand, heavily dependent upon tourism, has realised that diminished US services mean diminished dollars.

But Thai Airways sources say the main reason for the new negotiation is to get the rights to formalise the carrier's codesharing alliance with United.

Mead Jennings


Source: Airline Business