[Congressional Record Volume 142, Number 44 (Wednesday, March 27, 1996)]
[Senate]
[Pages S3006-S3009]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNITED STATES/FRANCE AVIATION RELATIONS
Mr. PRESSLER. Mr. President, I rise today to discuss the important
issue of United States aviation relations with the Government of
France. Although the immediate crisis concerning the upcoming schedule
for the summer season apparently has been resolved, I remain very
concerned about the state of U.S./French aviation relations.
As a result of France's decision in 1992 to renounce the bilateral
aviation agreement that existed between our two countries, France
currently is our only major aviation trading partner with whom we do
not have an air service agreement. In the absence of such an agreement,
U.S. and French carriers continue to fly between our two countries, but
they do so solely at the pleasure of each government and without the
necessary flexibility to increase or change service when market demand
warrants. Essentially, U.S./French air service is frozen as if the
clock stopped in 1992.
In a speech before the International Aviation Club of Washington last
month, I spoke at some length about the fires of air service
liberalization burning brightly on the European continent. In hailing
the enormously important U.S./German open skies agreement signed
several weeks ago, I noted that nearly 40 percent of U.S. travel to
Europe will now go to or connect through open skies markets. I ask
unanimous consent that the text of the speech to which I referred be
printed in the Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. PRESSLER. Although this wave of air service liberalization
touches France on three of its borders, France stands seemingly
oblivious to the competitive air service forces besieging it. The fact
of the matter is while its European neighbors are reaching out to
embrace the future of global aviation with the enlightened view that
the economic benefits of an open skies relationship with the United
States are a two-way street, France continues to cling to the past.
This choice is not without significant adverse consequences for
France's economy.
So what precisely is France's air service policy with respect to the
United States? It appears that policy can be best described as
``managed stagnation.'' In an attempt to rebalance the market share of
state-owned Air France vis-a-vis the highly competitive U.S. carriers,
France has made the unfortunate decision to forego the tremendous air
service growth other European countries are experiencing in their air
service relationships with the United States. Ironically, some of the
lucrative new air service opportunities European countries now enjoy
are the direct result of traffic that France's restrictive air service
policy has driven away to other countries.
According to a recent statement by Anne-Marie Idrac, the French State
Secretary for Transport, France ``is not any worse off'' for its
decision to renounce the U.S./French air service agreement. Economic
analysis, however, paints a far different--and quite sobering--picture.
In fact, this analysis shows France's policy of managed stagnation is a
recipe with a very bad aftertaste for the French economy. Let me
explain.
First, the adverse economic consequences of France's air service
policy is best illustrated by a comparison with the recent experiences
of the Netherlands. In 1991, both the U.S./French and U.S./Dutch air
service markets experienced tremendous growth. Scheduled passenger
traffic grew 21 percent and 14 percent respectively. In 1992, however,
aviation relations with France and the Netherlands turned abruptly in
opposite directions. Around
[[Page S3007]]
the same time France renounced the U.S./French bilateral aviation
agreement, the Netherlands opted to enter into an open skies agreement
with the United States.
What has resulted from these decisions? The U.S./Netherlands
passenger market has grown at a rate over 10 times faster than the
U.S./French market. Between 1992 and 1994, scheduled passenger service
between the United States and the Netherlands grew 38 percent. In stark
contrast, France's decision to renounce the U.S. air service agreement
caused passenger growth in the U.S./French market to abruptly halt.
Scheduled passenger traffic in the U.S./French market grew a measly 3
percent during that period, compared to 21 percent in 1991 the year
immediately prior to renunciation.
The net effect of these vastly different policies also is illustrated
dramatically by the aggregate size of both country's passenger market
with the United States. In 1991, the U.S./French passenger market was
100 percent larger than the U.S./Dutch market. By 1994, it was just 60
percent larger. What a difference two air service policies with the
United States can make!
Importantly, this trend of France foregoing tremendous air service
opportunities is reflected elsewhere in Europe as well. For instance,
between 1992 and 1994 scheduled passenger traffic between the United
States and Switzerland grew 30 percent--ten times faster than it did in
the French market. Amazingly, this tremendous growth does not reflect
the U.S./Switzerland open skies accord signed last year. As was the
case in the Netherlands, the U.S./Switzerland open skies agreement will
likely cause that rate of growth to accelerate. The more mature U.S./
British air service market also experienced strong growth--10 percent--
during this same period.
Unquestionably, France has succeeded at stagnating the U.S./French
passenger service market at a time when new transatlantic air service
opportunities for European countries with the United States abound.
Second, at a time when revenue from connecting passenger traffic is
increasingly important, France's air service policy is drying up U.S.
connecting traffic at Paris' two key international gateway airports,
Paris-Charles de Gaulle and Orly. Between 1992 and 1994, connecting
traffic carried on U.S. airlines fell 55 percent at the Paris airports.
Let me repeat this astonishing fact. Connecting traffic carried on U.S.
airlines fell 55 percent at the Paris airports between 1992 and 1994.
Where did this connecting traffic go? One need look no further than
competing airports on the European continent. During the same period,
U.S. airline connecting traffic grew 24 percent at Frankfurt and an
astounding 329 percent at Amsterdam's Schipol Airport! The recent U.S./
German open skies agreement, as well as open skies agreements the
United States signed last year with neighboring countries including
Belgium and Switzerland, will surely cause the rate of ongoing
connecting passenger traffic diversion away from Paris airports to
accelerate. In particular, I fully expect German airports will press
France hard in this competition for connecting passenger traffic.
Third, Air France, the intended beneficiary of France's decision to
renounce the U.S./French air service agreement, has on-balance suffered
as a result of France's policy of managed stagnation.
It is true that state-owned Air France has increased its share of the
U.S./French market from 29 percent in 1992 to 37 percent in late 1995.
However, this rebalancing of market share, which in large part resulted
from U.S. carriers routing connecting passengers to international
gateway airports in other continental European countries, has come at
an inordinately high price.
As a direct result of France's decision to tear up its air service
agreement with the United States, Air France is isolated as the only
major European carrier that does not have an alliance with a U.S.
carrier. Quite correctly in my view, our Department of Transportation
has indicated it will not approve any code-sharing alliance between Air
France and a U.S. carrier until France agrees to enter into a
sufficiently liberal air service agreement with the United States.
What is the practical consequence for Air France? Every major
European carrier has access to feed traffic from the very lucrative
U.S. domestic market except Air France. To make matters worse for Air
France, if the United Airlines and Delta Air Lines alliances with
European carriers are granted antitrust immunity, in combination with
the Northwest/KLM alliance, nearly 50 percent of passenger traffic
between the United States and Europe will be carried on fully
integrated alliances. Without a doubt, France's air service policy with
the United States has placed Air France at a severe competitive
disadvantage in the transatlantic and connecting service markets.
A recent paper by the Commission of the European Communities on U.S./
E.C. aviation relations made this point well. According to the E.C.,
``the commercial advantages of strategic alliances are such that it
will be difficult for a major European carrier with the ambition to
become (or remain) a global player, not to enter into an alliance with
a U.S. partner.'' The E.C. is absolutely correct. France's decision to
continue to forgo an air service agreement with the United States is
threatening Air France's long-term future as a global player.
Mr. President, France's aviation policy with the United States is not
only inconsistent with the trend of air service liberalization sweeping
Europe, it also is badly out of step with France's own domestic air
service policy. Earlier this year, France opened its skies to domestic
competition thereby ending the virtual monopoly of Air Inter, the
domestic wing of Air France. This forward looking domestic policy came
about because France realized it needed to better position Air Inter to
compete next year in the deregulated intra-European air service market.
Unfortunately, France has failed to apply this same vision to its air
service policy with the United States. In marked contrast, France
continues to cling to the past and it uses government restrictions to
protect Air France from competition in the increasingly liberalized
transatlantic market.
The huge economic costs the French economy is bearing as a direct
result of France's misguided air service policy with the United States
reminds me of an editorial I read earlier this year shortly after
Thailand abandoned its economically disastrous experiment with
renunciation of its air service agreement with the United States. That
January 26, 1996, editorial from the Bangkok Post astutely called
Thailand's decision to renew formal aviation relations with the United
States ``a victory for common sense.''
Let me add Thailand's decision was also a victory for forward looking
economic policy. In condemning the economic folly of Thailand's failed
experiment, the Bangkok Post added ``every airline that comes here or
increases its frequency is investing more in the country, providing
more jobs, bringing more tourists. Restricting those operations
necessarily has the reverse effect.'' I ask unanimous consent that the
text of the editorial from the Bangkok Post to which I have referred be
printed in the Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 2.)
Mr. PRESSLER. Mr. President, let me conclude by saying I hope France
will recognize its air service policy with the United States is an
economic failure that is exacting a very high cost in terms of lost
jobs and other commercial opportunities. To remedy this situation, I
hope France will renew its formal aviation relations with the United
States by agreeing to a liberal air service agreement. As the
Commission of the European Communities recent study on EC/US aviation
relations recently warned, countries such as France with a restrictive
air service policy place themselves at great economic risk as the wave
of air service liberalization continues to sweep across Europe.
Exhibit 1
Remarks of Senator Larry Pressler, Before the International Aviation
Club of Washington, DC, February 14, 1996
Bruce, thank you for your kind introduction. I am pleased
to join the long list of outstanding speakers who have been
privileged to share their views on international aviation
policy with this distinguished group.
Let me also thank the distinguished individuals who
graciously accepted invitations to join me at the head table
today. My friend
[[Page S3008]]
Ambassador Chrobog and I met through our mutual love of
opera. We also share a belief that the economic benefits of
liberalized trade between nations is a two-way street. Mr.
Ambassador, I am pleased that our two nations are on the
brink of signing an open skies agreement of truly historic
magnitude. Such an agreement will be momentous for both
nations and will be a catalyst for fully liberalizing the
enormous U.S./E.U. air service market. In pursuing this
initiative, I believe Germany is providing outstanding
leadership for all of its European Union partners.
Carol and Charlie, I am also pleased you are able to be
here today. Carol and I share a common challenge. We each are
trying to make U.S. air carriers realize that good things can
happen to them when they work together as an industry. Robust
competition and long-term economic vision need not be
mutually exclusive. In fact, I would argue they can, and
indeed should, go hand-in-hand. Charlie, as you will
unfortunately experience firsthand, much work remains to be
done in this regard.
For Valentines Day I had considered making sugar-coated
remarks extolling the numerous benefits of a U.S./German open
skies agreement. I decided, however, to save that speech for
another day. The bitter sweet reality of U.S. international
aviation policy is that every step taken--even major leaps
forward such as a possible U.S./Germany open skies
agreement--is met by parochial infighting among our carriers.
Regrettably, I fully expect efforts to finalize the U.S./
German open skies agreement will not escape this plague.
Let me say that I firmly believe pernicious infighting
among our carriers is the single greatest barrier to the
United States' efforts to open and expand global air service
markets for U.S. carriers. It is a sad story which is played
out time and time again.
As leaders in the aviation community, I come to you today
with a challenge. I challenge you to broaden your vision of
the significance of new international air service
opportunities for our carriers. To me, these opportunities
conjure up images of tremendous trade benefits which buoy the
U.S. economy. I see significant economic benefits derived by
our airline industry and aircraft manufacturers. I think of
consumers benefiting by enhanced choice and competitive
prices. I also see new jobs for American workers and new
commercial opportunities for our States and communities.
I urge you to have the vision to look beyond which carrier
has positioned itself to benefit most from new international
air service opportunities. Simply put, I challenge you to
make your focus the American flag on the tail of airplanes
providing new service opportunities, not the name on the side
of the plane.
With that challenge in mind, let me now turn to my specific
remarks. Today I want to focus on exciting developments and
old challenges in Europe. Of course, I speak of Germany and
the United Kingdom respectively. However, since your last
three speakers discussed U.S./Japan aviation relations--a
subject in which I have a very keen interest--I cannot resist
making a few points.
First, I am deeply troubled the Government of Japan
continues to refuse to respect the beyond rights of our so-
called 1952 carriers. Those rights are guaranteed by the
U.S./Japan air service agreement. International agreements
between countries are sacred trusts and nothing short of full
compliance is acceptable.
Second, I am also very concerned about the Kyoto Forum
which the Japanese organized recently. By excluding the
United States and other Western country members of APEC, I
believe the Government of Japan acted contrary to the spirit
and intent of the Bogor Declaration.
Third, the Government of Japan's appeal for the United
States to ``equalize'' aviation opportunities between our
countries is misdirected. Market forces, not the U.S./Japan
air service agreement, has tilted transpacific market share
advantage in favor of U.S. carriers.
As I have said in the Senate numerous times, the disparity
in transpacific market share is due to the fact that Japanese
carriers--which labor under heavy government regulation--
cannot compete with our more efficient carriers whose
operating costs are substantially lower than their Japanese
counterparts. If equality of transpacific market share is
what the Government of Japan seeks, it should look no further
than to itself to take steps which will enable Japanese
carriers to compete more effectively with U.S. carriers. It
is critical we not forget that just 10 years ago, under the
very same bilateral agreement that the Government of Japan
now criticizes, Japanese carriers had a larger market share
on transpacific routes than U.S. competitors.
Fourth, complaints by the Government of Japan regarding the
limited Fifth Freedom opportunities of our carriers must be
put in proper context by considering the enormous offsetting
Sixth Freedom opportunities Japanese carriers are exploiting
between the Asia-Pacific market and the United States. Viewed
from this perspective, Japan's criticism is without merit. In
fact, I regard it as somewhat remarkable when one considers
it comes from a major trading partner with whom the United
States has a trade deficit of more than $65 billion!
Finally, in a floor speech on October 27th, I called on our
so-called MOU carriers to come forward with economic analysis
supporting their position that the cornerstone of our
negotiating strategy with Japan should be to trade away the
beyond rights of our 1952 carriers. Having seen no such
study, today I renew my call for the MOU carriers to make
their case with numbers, not rhetoric. I find it a bit odd
that MOU carriers who criticize DOT for not doing adequate
prenegotiation economic analysis are now pushing DOT to rush
into passenger talks, even though these carriers have yet to
provide economic analysis which supports their position.
Turning to Europe, let me first say that if the identity of
the author of Primary Colors is the best kept secret in
Washington, my support for an open skies agreement with
Germany is one of the worst. I am delighted Secretary Pena
and German Transport Minister Wissmann have agreed on the
framework for an open skies agreement between our countries.
I am also pleased a formal round of talks will be held in
Washington next week to iron out textual details. I
enthusiastically support swift completion of a formal U.S./
German open skies agreement.
How is it that a U.S./German open skies agreement is within
reach? Secretary Pena had the vision to recognize that
competition is always the best ally to open restrictive
markets. He built on the vision that President Bush and the
Dutch government both showed when the United States and the
Netherlands signed an open skies agreement in 1992. At that
time, it was a very bold move, one for which Jeff Shane, who
is here today, should be commended.
Jeff created a model on the European continent by which all
neighboring countries could see firsthand the tremendous
economic benefits that are produced by a liberalized aviation
relationship with the United States. Last year, Secretary
Pena built on that foundation with the nine European country
open skies initiative. Then, he reached out to our excellent
friend and great trading partner, Germany.
The timing could not have been better. Minister Wissmann--
himself a man of great vision--recognized the time was right
to secure for the German economy and German consumers the
great benefits that unquestionably would result from an open
skies agreement with the United States. As I said earlier, in
pursuing this initiative, Germany has provided outstanding
leadership for its partners in the European Union.
Before I discuss why I believe this tide of liberalization
will reach the shores of the United Kingdom, let me address
an issue that has come to my attention recently regarding the
framework of the U.S./German open skies agreement.
I understand a question has been raised about the timing of
when the U.S./German open skies agreement would take full
force relative to a final decision on an application for
antitrust immunity which is expected to be filed by the
United Airlines/Lufthansa alliance. I do not consider this to
be a problem. I have total confidence in Secretary Pena's
ability to fully and fairly discharge his statutory duty in
considering that application when it is filed, regardless of
when the agreement goes into effect. I feel compelled to add
I am somewhat mystified that some of our carriers continue to
sell Secretary Pena so short, at the same time they reap the
benefits from his excellent leadership in international
aviation policy.
Last week in London, Malcolm Rifkind, the U.K. Secretary of
State for Foreign and Commonwealth Affairs, gave a very
important speech in which he advocated nothing less than
transatlantic free trade. He called for ``political will and
vision'' to bring this goal about. Pledging that ``Britain
will be a champion of greater economic liberalization across
the Atlantic,'' Minister Rifkind noted the United Kingdom has
been leading the way and said Britain would continue to do
so.
The United Kingdom deserves great credit as a shining
beacon for liberalizing trade in the U.S./E.U. market
generally. However, its policy in the area of transatlantic
air services is far out of step with the principles of free
trade.
Let me share two truly remarkable facts which dramatically
make my point. Last year, British Airways had a larger share
of the U.S./U.K. passenger market than all U.S. carriers
combined! Also, data shows that in terms of U.S./U.K. market
share, two of the top three carriers are British airlines!
Without question, market forces are not controlling the
distribution of air service opportunities between the United
States and Britain.
How will competitive forces unleashed by a U.S./German open
skies agreement pressure Britain to reassess its outdated
aviation policy which tarnishes an otherwise very impressive
record on liberalizing transatlantic trade? The answer lies
at two levels: heightened competition by continental European
airports for connecting passenger traffic and enhanced
competition by U.S. carrier alliances against British
airlines.
London always will be a popular destination for passengers
originating in the United States. That is not to say,
however, that in this era of global networks, connecting
passengers will continue to feel a compelling need to use
Heathrow rather than airports such as Amsterdam's Schipol,
Frankfurt or the new one planned at Berlin-Brandenburg.
Connecting passengers look for convenient schedules and
competitive fares. Due to the lack of European gateway
opportunities, Heathrow once was the connecting airport of
necessity, not choice, for passengers originating in the
United States. Times have changed.
[[Page S3009]]
Liberalization of air service markets on the European
continent have created new connecting service options.
Evidence already clearly shows connecting traffic is being
diverted away from London. Statistics dramatically illustrate
this point. Between 1992 and 1994, connecting traffic carried
on U.S. airlines grew just 3 percent at Heathrow. During the
same period, U.S. connecting traffic grew 24 percent at
Frankfurt and an astounding 329 percent at Schipol! An open
skies agreement with Germany will greatly accelerate the rate
of this connecting passenger diversion.
These statistics are very interesting but should they
matter to a British policymaker? Absolutely. This trend
should raise serious concerns considering that last year
alone connecting traffic accounted for more than 1 billion
pounds of export earnings for the United Kingdom.
A U.S./German open skies agreement will also make U.S.
alliances with European carriers even more formidable
competitors in the U.S./Europe air service market. This will
not be a welcome development for British carriers. If the
United and Delta alliances are granted antitrust immunity, in
combination with the Northwest alliance, nearly 50 percent of
passenger traffic between the United States and Europe will
be carried on fully integrated alliances.
Will this pose a competitive challenge for British
carriers? Investors in British Airways sure thought so.
According to a Financial Times article last week, despite a
quarterly pre-tax profit of 30 percent, British Airways
shares fell on the news of the ``preliminary `open skies'
deal struck between Germany and the U.S.'' British Airways'
public attack on antitrust immunity last month at an ABA
conference also is very telling on this point. Privately,
British Airways has made no secret they very much covet
antitrust immunity for their alliance with USAir.
So where do we go from here? I think U.S./U.K. negotiations
should resume, but not on the terms of the October offer
which was highly conditioned and essentially allowed the
British to pick which U.S. carriers competed against British
carriers in what markets. Instead, I encourage the British to
come to the table with a ``bigger, bolder and braver''
approach like Sir Colin Marshall, Chairman of British
Airways, called for last November.
First, to help clear the way for more ambitious
negotiations, I am announcing today that I plan to introduce
legislation to increase to 49 percent the level of
permissible foreign investment in U.S. airlines. I am already
working with the Administration to determine a formulation to
maximize the benefits of this tool. One thing is certain, the
limited, highly conditioned October offer would not trigger
the benefits of the bill I intend to introduce.
Second, I am also calling today for U.S. carriers to stop
being ``pennywise and pound foolish'' with respect to Fly
America traffic. As a taxpayer, I want the U.S. government to
pay the most competitive price for government travel. As a
policymaker, I find nothing in the legislative history of the
Fly America statute even suggesting Congress intended to
guarantee U.S. carriers a monopoly profit for government
travel. I see no good reason the opportunity for British
carriers to competitively bid through their U.S. carrier
partners for Fly America traffic should not be on the table
if British negotiators pursue a ``bigger, bolder and braver''
approach.
Third, as far as Heathrow access is concerned, I call on
the British to muster up the ``political will and vision''
Minister Rifkind spoke of to change the runway operations at
Heathrow. On this side of the Atlantic, we are constantly
told by the British Ministry of Transport that additional
Heathrow access is impossible because there are no additional
take-off and landing slots. What the British fail to tell us
is a number of U.K. airport capacity studies, including one
issued as recently as August 1994, have concluded the British
could potentially create an additional 100 daily takeoff
slots and an additional 100 daily departure slots at Heathrow
if they switched its runways to more efficient mixed-mode
operations.
I am keenly aware this is a sensitive political issue for
the British government. Not long after I suggested this last
July in London, I received a letter from the Heathrow Noise
Coalition politely telling me to mind my own business. One
thing is clear, however, the British do not have a monopoly
on political problems relating to Heathrow. I need not tell
this audience that Heathrow access is a hot button political
issue in the United States and, quite frankly, an issue that
is straining relations between our two countries.
Let me close by saying an open skies agreement with Germany
unquestionably would be the product of vision by both
countries. I hope the same long-term economic vision will
prevail in our aviation relations with the Japanese and the
British. Again, thank you for the opportunity to join you
today.
Exhibit 2
[From the Bangkok Post, Fri, Jan. 26, 1996]
U.S.-Thai Aviation Deal a Victory for Common Sense
After five years of going eyeball to eyeball, the US and
Thailand finally concluded an aviation agreement last January
19. Who blinked first? By all indications, Thailand. It had
to, the policy of getting US airlines to reduce their
frequencies between Northeast Asia and Thailand was working
so brilliantly that it had to be scrapped and reversed. After
all, Delta had pulled out of Thailand, both Northwest and
United Airlines had reduced their frequencies. Lest anyone
forget, that was the original intention for scrapping the
agreement in November 1990. When the impact of that hit the
tourism industry between the eyes, the backlash was
instantaneous. In barely four rounds of informal and formal
talks, an agreement materialized where about seven previous
rounds had all failed.
There are many reasons for this agreement, and the speed at
which it was pursued. But most important among them is that
it risked becoming a serious political liability for
Thailand's aviation negotiators who were running out of
reasons for maintaining their hardline stand. The blast from
the Association of Thai Travel Agents and its independent
study on the aviation industry was one facet of the mounting
pressure. Then there was all this talk of open-skies and
aviation liberalization being pursued under the ASEAN and
APEC umbrellas.
Thailand was being increasingly isolated as the US patched
up its aviation differences, one by one, with other Asian and
European countries. On the cargo front, the US-Filipino
aviation agreement had opened a window of opportunity for
Federal Express to develop Subic Bay as a regional cargo hub,
a move that would leave Thailand's own Global Transpak
project wallowing in the water. The American Society of
Travel Agents annual convention is to be held in Bangkok in
November, bringing 10,000 agents who would wonder how they
are supposed to promote tourism to Thailand when the tourists
can't fly here.
Moreover, the void was preventing the full consummation of
the United Airlines-Thai International alliance. Both of
Thailand's key aviation negotiators, the director-general of
the aviation department and the permanent secretary of the
ministry of communications, sit on THAI's board. By
continuing to stall on the agreement, they were effectively
hampering the progress of THAI. And soon coming to town as
keynote speaker of the PATA conference in April is Garry
Greenwald, the chairman of United Airlines who, lest anyone
forget, recently tongue-lashed Japan's restrictive aviation
policy and who would have no doubt have delivered a similar
riposte at Thailand's had an agreement not been reached by
then.
There was simply no way that Thailand could have won this
battle. But neither is this agreement a victory for the
United States. It is a victory for public pressure and the
power of the Thai tourism, industry, especially groupings
like the Association of Thai Travel Agents and people like
Anant Sirisant who had the gumption to stand up and be
counted, at considerable risk to himself and his own company,
the East-West Group. While many other operators serve on
committees and use their positions for personal
aggrandizement, Mr. Anant stuck his neck out, and won.
Several months ago, this newspaper, too, called Thai
aviation policy, ``a national outrage.'' Suddenly, things
began moving.
It has been said before, and it needs to be said again,
global aviation is administered by archaic and backward 50-
year-old rules that governments are having extreme difficult
dismantling. There is no logical explanation for the
structure any more; it's just the way it's done, especially
in the absence of an alternative. Every country has to take
its own course of action. In Thailand's case, every airline
that comes here or increases its frequency is investing more
in the country, providing more jobs, bringing more tourists.
Restricting those operations necessarily has the reverse
effect.
Foreign airlines serving Bangkok now need to forge stronger
relationships with Thai hotels and tour operators, work with
them, and use their political and economic strength to get
what they want. This approach must, under no circumstances,
be adversarial or aggressive, but always rational and
constructive. If THAI is in the dumps, and likely to remain
there for at least a few years as it seeks to regain its
erstwhile prestige, there is no reason why other airlines
should be hampered from raising their frequencies and
bringing more tourists to spend their money in Thailand.
The U.S.-Thai deal is a clear victory for the concept of
conducting the aviation business in an open and competitive
manner. Because no matter what happens, it should always be
the public that should benefit.
____________________