BIV article:
Open skies advocated for B.C.
Analysts say Ottawa’s continued focus on preserving Air Canada’s monopoly is stifling international air transportation opportunities in Western Canada
Andrew Petrozzi
Ottawa should negotiate “open-skies” deals between Asian governments and B.C. and Western Canada even if it continues to refuse to open the entire country to international air carriers.
So says Tae Oum, UPS foundation chairman at the University of British Columbia’s Sauder School of Business and president of the Air Transport Research Society.
Oum chaired a recent panel discussion in Vancouver on the economic benefits of open-skies agreements, which give more airlines greater access to the country’s airports.
During a BIV interview, Oum cited the example of a 2006 bilateral agreement between Korea and China that includes transborder open skies between Korea and the Chinese provinces of Sandong and Heinan.
Oum’s suggestion was one among many aimed at realizing gains for B.C. and Western Canada under the federal Conservative government’s 2006 blue-sky policy, which was designed to liberalize Canada’s policies that preserve a monopoly for Air Canada, the country’s former national airline.
While there have been some recent gains (see “Canada-South Korea air agreement to provide $300 million tourism boost to B.C.” – issue 1031; July 28-August 3), many carriers, including Emirates Airlines and Singapore Airlines, want to increase service to Canada in general and B.C. in particular, but their requests have fallen on deaf ears in Ottawa.
Oum said the federal government and Transport Canada need to change their approach to the airline sector.
As an air-transport industry matures, its direct contribution to the economy becomes smaller relative to the size of tourism, foreign trade and direct investment generated by expanded air access.
“We’re spending a lot of time and effort trying to protect this small pie at the expense of consumers and the national economy as a whole including tourism and international trade,” said Oum.
According to Oum, air transportation’s contribution to Canada’s economy was $5.9 billion in 2008 compared with $30 billion for tourism and $932 billion in international trade. He said the antiquated policy of protecting national airlines is inconsistent with maximizing national economic benefits.
Oum added that Canadian air policy needs to become pro-economy and pro-consumer as are policies in jurisdictions like the European Union, the U.S. and Australia.
Andrew Parker, Emirates Airlines’ senior vice-president, also spoke at the September 25 B.C. International Open Skies Summit. He told BIV that his airline has been seeking “reasonable access” to Canada since the late 1990s. But it remains restricted to three flights per week to Toronto. The airline also wants to fly into Vancouver and Calgary.
“Other than Transport Canada and Air Canada, we have met no one who is opposed to letting carriers like Emirates have reasonable access to bringing tourists and carry goods out of Canada in a reasonable way.”
Vancouver is a desired tourist destination, and business connections between the gas and oil industries in Alberta and the Middle East make it a natural choice for direct air flights.
“We are very frustrated that this policy remains that very heavily restricts international carriers from getting access,” said Parker.
He estimated that every landing of a Boeing 777, which is what Emirates flies to Canada, generates about 800 direct employment hours in Canada.
“We would employ thousands of extra people in Western Canada if we were given access,” said Parker. “Clearly we think there would be, in the first 10 years of operations, a multibillion-dollar injection of tourism, exports and direct economic activity.”
Parker said that while summits and the support of provincial premiers such as B.C.’s Gordon Campbell and Alberta’s Ed Stelmach generate momentum, his airline and others who have been “in the queue for a long, long time” are resigned to “continue politely writing letters” to the federal government.
Canada needs to adopt open skies as a principle when negotiating air bilateral agreements with foreign governments, Oum said.
He added that Ottawa must also abolish the confidential addenda connected to bilateral air-services agreements, because they’re “fundamentally undemocratic.”
“Confidential addenda are not about security questions. [They are] about how prices will be regulated, how frequencies and capacity will be regulated and all commercial matters.
“There is virtually nothing about security matters. They are signing confidential agreements to hide true information from independent analysis by academics like myself.”
According to the B.C. government, Canada has 82 bilateral air-service agreements, but only eight classify as open skies. The other 74 have restrictions that prevent airports in Western Canada from competing with airports in the U.S. and Central Canada for international air travel and commerce.
By press time, Transport Canada had not responded to requests for comment from BIV. •
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