OPEN SKIES AGREEMENT WITH THE UNITED STATES
The Canada-United States (U.S.) air transportation market is unique in the
world. The Open Skies agreement between the two countries is expected to provide
more opportunities for better air services, increased flight options, greater
efficiencies for airlines, increased competition and reduced prices for
consumers.
Scheduled air services between Canada and the U.S. were previously governed by
the February 24, 1995 air transport agreement, which provided substantial benefits
to travellers, shippers and the air transport industries of both countries.
Following implementation of the agreement, the Canada-U.S. air transportation
market experienced rapid growth.
While the 1995 agreement provided open access between the Canada-U.S. markets,
it restricted Canadian and U.S. air carriers' access to each other's
international markets. For example, except in very limited instances, a Canadian
carrier could not pick up traffic in the United States and fly to another
country.
In recent years, many stakeholders in Canada identified an expansion of the
Canada-U.S. agreement as a priority. In 2005, Canada and
the U.S. agreed that
discussions on further liberalization of the 1995 agreement were timely.
Under the Open Skies agreement, air carriers of both countries will be able to:
- pick up passenger and/or all-cargo traffic in the other partner's territory
and carry it to a third country as part of a service to or from their home
territory;
- operate stand-alone all-cargo services between the other partner's territory
and a third country; and
- offer the lowest prices for services between the other partner's territory and
a third country.
The liberalized agreement does not permit a U.S. carrier to carry domestic
traffic between Canadian cities or vice versa, a practice known as cabotage.
Transport Canada estimates that the Canada-U.S. air transportation market
generated approximately 19.8 million passengers in 2005, making it the largest
international air transportation market in the world.
March 2007
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