Canada, U.S. Sign Open Skies Accord

O'REGAN: Canadian travellers could soon have more choices when they fly. A new deal between Canada and the United States opens the skies for more competition between airlines. Analysts say that this is good news for consumers, it could lead to lower prices.

Transport Minister Lawrence Cannon now joins us from Ottawa to explain what the Open Skies agreement means.

Minister, good morning.

CANNON: Good morning to you.

O'REGAN: Let's begin with that. What does this mean for the average Canadian? I mean, so many Canadians fly. Tell us how they will benefit from this.

CANNON: Well, what we've done basically is we've opened up this marketplace. And that indicates that there will be, as I mentioned before, new markets, new prices, lower prices, greater opportunity for not only our air carriers but also for consumers. As we increase the marketplace and as we enable competition to take place, that will drive the prices down.

O'REGAN: So it means that American Airlines now, as I understand it, can fly, let's say, from Los Angeles to Calgary and then from Calgary to, I don't know, Seoul, Korea. Is that the case? They can pick up Canadian passengers and then move on to another country?

CANNON: That's correct. In the same manner, for instance, as Air Canada or WestJet could be in Chicago and go to Toronto and then go to London.

So, it's a whole different set of rules and regulations now. It's much more open. And, hopefully -- it is in many ways similar to the deal that we struck late last year with the United Kingdom. So, this is all part of our Blue Skies/Open Skies policy that the government put forward in late October/early November.

O'REGAN: It doesn't mean, though, -- or does it mean? you tell me -- whether, let's say, you could take an American or United plane from Halifax to Toronto?

CANNON: No, that is not in the works. That's known as cabotage. So we're not there. What we are actually doing is we are following the patterns and we are following the airline industry's capacity also to be able to adapt to these new changes --

O'REGAN: Yeah, it's an evolution, in a way, isn't it?

CANNON: Well, that's correct. What we want to be able to do is to accompany not only the airlines but of course the consumers as we give them more opportunity.

O'REGAN: So, this is primarily going to benefit people who fly transborder traffic but particularly people who fly internationally, to Europe or to Asia or to South America or whatever the case may be, correct?

CANNON: Yes. And the market is roughly, from the estimations that have been given, we're talking about 20 million passengers on a yearly basis in this marketplace.

It also, I should indicate that it also covers the air cargo carriers. So, the exact same conditions that are prevalent for the passenger travel service is equally accessible for the air cargo carriers.

O'REGAN: What's been the obstacles up until now? I mean, what have been the difficulties in these negotiations? We've been talking Open Skies, you know, slowly but surely with the United States for some time. But what are your key concerns as a negotiator on behalf of the Canadian government?

CANNON: Well, fundamentally, we want to make sure that it is a relatively level playing field inasmuch as, for instance, we have people who can come from a marketplace that is similar in many ways.

So, let me draw the example if we had, for instance, a small country that had a very strong capacity to service, would we enable them to come to Canada and do that service? That's a question that is looked at very seriously. In other words, do we want a small country that wouldn't deliver as many passengers to Canada to be able to do exactly what we're doing? That's something that, we're not there yet.

What we want to able to do is make sure that as the marketplace grows it also offers advantages to Canadian air carriers. So, it has to be a win-win situation as we move forward.

O'REGAN: And right now Air Canada is saying that they welcome the competition. And most analysts are saying that Canadian airlines will be the primary beneficiaries of this.

Thank you very much, sir. We appreciate it.

CANNON: Thank you. Have a good day.

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