Civil Aeronautics Board Chairman Dan McKinnon took a tough line against Japan this week, saying the United States will not agree to a new air services agreement that further restricts the rights of U.S. airlines in Japan.
"At a time when Japan is enjoying record trade surpluses with the United States, I cannot see how the government of Japan can simultaneously ask the United States to further open our market to Japan's airlines while seeking to limit the access and ability of our carriers to compete in the Japanese market," McKinnon told the International Aviation Club Tuesday in his first public speech since taking office in October.
McKinnon said the United States has offered "a generous package" of additional U.S. route rights to the Japanese to satisfy their longstanding claim that the current agreement is imbalanced, but the government of Japan "still insists on more new rights."
They have offered "in return for their expansive desires" exclusive restrictions on U.S. carriers' rights, capacity constraints, no meaningful pricing flexibility and no assurance that the U.S. carriers will obtain equivalent access to the Japanese market, he said.
McKinnon said Japan is in clear violation of the U.S.-Japan air agreement for refusing to grant United Airlines landing rights in Tokyo. Japan claims the current agreement is imbalanced and letting United in would make it more imbalanced, but McKinnon said Japan Air Lines derives greater economic benefit from it than all the U.S. airlines combined.
He said JAL's revenues on traffic between the two countries exceed the revenues earned by any U.S. airline and that JAL's revenues, including traffic carried from the U.S. beyond Japan, exceed the total revenues of all the U.S. carriers.
Talks with the Japanese are scheduled to resume next month. If the Japanese decide to keep the old agreement, the United States will insist that all its provisions--including the right to name additional airlines to fly to Japan--be honored, McKinnon warned. If no agreement can be reached, the CAB will urge the president to impose a series of sanctions against JAL's U.S. authority, he said.