The United States and Canada agreed yesterday to begin negotiations next year on a treaty that would allow the airlines of each nation unparalleled access to each other's markets.
At a news conference yesterday, Transportation Secretary Samuel K. Skinner said that everything is on the table, including the possibility that a foreign airline could be allowed to carry passengers from one point to another within the other country. Right now, no foreign carrier is allowed to establish operations and carry passengers within the United States, and no U.S. airline has that right elsewhere.
With those rights, a U.S. airline could, for instance, set up a hub operation in Montreal or some other Canadian city and carry passengers within Canada, greatly increasing competition and offering consumers expanded service. U.S. carriers may now fly into Canada, but not pick up passengers for other Canadian destinations.
"It's clearly going to be discussed, and it's on the table," Skinner said.
Skinner and Canadian Transport Minister Doug Lewis said the 1974 U.S.-Canadian agreement is largely outmoded now, especially with the growth of travel between the two countries. They said, for instance, that out of 100 U.S. airline hubs, only 35 are permitted to have direct service to Canada. U.S. charter flights are also not allowed, although Canadian charters are allowed in the United States.
The two also pointed out that the U.S.-Canada Free Trade Agreement of 1988 had created a new economic environment that makes more flexible travel necessary.
About 13 million passengers travel between the United States and Canada each year, about two-thirds of which are carried by U.S. airlines. Almost all the 2 million charter passengers fly on Canadian carriers.