THE MEETING IN Jamaica last weekend, called by the U.S. government to help sell deregulation to the international airlines, has to be rated as -- at best -- a standoff. "We will admit that it is not clear that we're right if you will admit that it is not clear you're right," was the way Assistant Secretary of State James R. Atwood put it at the final session. Not much of a plus, then, but also not much of a surprise. It took most of a decade to convince the domestic airlines that all-out competition would be good for them and good for the country -- and some of them still don't believe it. It is likely to take at least as long to persuade the international carriers, and the governments that control them, that they, too, can prosper in a less tightly regulated environment.
Many of the arguments against introducing more competition into international aviation sound like replays of the arguments that were made against domestic deregulation. Large, efficient airlines (primarily American-owned) will overwhelm their competitors. Small countries will lose service. The interests of business travelers and shippers will be subordinated to those of tourists and casual passengers. The international aviation network will fall apart.
There is some validity in each of those arguments, just as there was when their counterparts were used against domestic deregulation -- but not enough to outweigh the benefits of more competition. The cost of air travel abroad, just like the cost of air travel in this country, would come down if barriers against real competition were eliminated.
That has started to happen across the North Atlantic. Recently negotiated treaties and a policy of the Civil Aeronautics Board to permit almost every domestic airline to enter the international market have greatly expanded competition on the United States-Europe routes. Many international-airline executives want to watch this "test" before letting deregulation or competition advance one step forward. But even if service improves and costs come down on those routes, as they probably will, other objections will be forthcoming.
The real problems of opening up the international skies derive from the diverse nature of the airlines involved. Some are privately owned, and their executives may not recognize the ultimate benefits of competition. Others are heavily subsidized by governments that feel a political need to have a flag carrier and an economic need to protect its near-monopoly. Still others are owned by governments in which competition is an alien idea. It is difficult to imagine, for instance, real competition any time soon on routes in and out of the Soviet Union or other communist countries. Elsewhere in the world, however, competition can increase if more governments will recognize that travel is a commodity that can and should be sold rather than rationed on a highly restricted basis.
If the United States is serious about deregulating international airlines, one of the first things that will have to go is the "buy American" policy that requires government-paid trips to be taken on U.S. flag carriers. As long as that policy is in effect, this country will have an increasingly difficult time arguing that other nations should remove the protectionist barriers they have created -- limited routes and sched-ules, high and fixed prices, and other restrictive practices. One way to begin opening the skies is to put that "buy American" policy on the trading block as one of the chips in bilateral negotiations.