The US is continuing its hard line in bilateral talks with Japan in the wake of its victory over the shipping showdown with Tokyo. The chances of an outline agreement being signed at the Apec economic summit in Vancouver on 24 November seemed slim but an accord seemed imminent.
Crucially, the new accord would give All Nippon Airways incumbent status, putting it on a par with Japan Airlines, Northwest, United, and Federal Express and removing the imbalance in designated carriers seen by Japan as symptomatic of the bilateral's shortcomings. ANA would be able to add capacity in designated city pairs and fly beyond the US without further US approval.
The US proposal includes 70 new transpacific flights a week by each side, subject to resolving slot issues at Tokyo/Narita airport. The US would also be able to designate another carrier on transpacific routes while Japan could name an all-cargo operator.
The US also wants to add Osaka/Kansai as a designated gateway for three carriers - American, Delta, and Continental. In exchange Japanese carriers would receive 10 more US gateways.
The two sides remain split on proposed codesharing deals between US and Japanese airlines. Tokyo rejected a recent US request for same-country codesharing but would sanction agreements between US and third country carriers over Japan. Japanese carriers would receive reciprocal third country codesharing rights over US hubs.
Finally, US incumbent carriers would be able to add new fifth freedom flights without prior Japanese approval, though pre-agreed limits on fifth freedom traffic would remain.
Slot allocation at Narita still remains the highest hurdle. US airlines already use one third of Narita's slots, and Japan is adamant it won't concede more. The US incumbents are resisting Tokyo's demand that they use existing fifth freedom slots for new third and fourth freedom flights. A deal will require both sides to concede some slots for these flights.
The prospect of a second Narita runway in four years time has prompted US negotiators to press for more flights within that timeframe. Washington wants at least 21 more weekly transpacific flights plus up to two more designated US carriers. This would allow Washington to claim the accord is a move in the right direction towards the US open skies template set up with European states.
The remaining issue is the long-running disagreement over US fifth freedom flights. Tokyo has agreed to lift most procedural objections, but still insists on restricting the amount of fifth freedom traffic carried by US airlines on fifth freedom sectors. An agreement that effectively limits slots available for US-operated fifth freedom flights may be the only way to bypass this intractable dispute.
David Knibb
Source: Airline Business
