Eventually national boundaries would cease to exist – at least for the aviation industry. If international air carriers get their way, open skies agreements, like the two recently approved between the United States and China, and the European Union, would deregulate the aviation industry and open it up to free competition among private companies. The ultimate winner, they say, is the passenger who would end up paying less money per ticket. At the recent International Air Transport Association (IATA) conference held in Vancouver, the sentiment was that the currently-regulated aviation industry is behind the times. The IATA is an international trade body that represents some 250 airlines worldwide. "We're living in a time capsule with 60-year-old rules," IATA Director General Giovanni Bisignani told the audience at the conference, referring to the traditional bilateral agreements between countries that determine who can fly where, when and how often. "We need the freedom to sell our products where markets exist and to merge or consolidate where it makes business sense. The bilateral system belongs in a museum next to the paper ticket." Bisignani called the open skies bilateral agreement between the United States and the European Union a step in the right direction, but said it was not enough.

© Houston Airport System Future open skies agreements promise to continue expanding the number of international carriers serving Houston through Bush Airport.

Rather than these types of agreements, the IATA favors a free-for-all approach to global aviation which would liberalize all skies to all airlines.

Currently, airlines must seek the authorization of their respective governing bodies to fly into new international territories. Many times they have to compete with one another for the new routes. In the US, for example, the Department of Transportation reviews submitted applications from competing airlines and grants a specific route to only one of the interested parties.

Liberalization would eliminate this process. Carriers would be able to fly into any territory with an available gate. Not all airlines, however, support this approach to deregulation.

Carriers like Houston-based Continental Airlines see more potential in bilateral open skies agreements. Almost immediately after the signing of the US-EU agreement, which opened up Heathrow Airport in London to US carriers for the first time in history, Continental expressed plans to launch new Heathrow service from Bush Intercontinental Airport (IAH).

Last month, when US Secretary of Transportation Mary Peters and Chinese Minister of Civil Aviation Yang Yuanyuan announced the approval of a new US-China open skies agreement, Continental was once again among the first to express their excitement with the new pact. The carrier said the agreement would create economic opportunities across the United States and that it would provide consumers significantly greater choices for their US-China travel needs.

Under the new agreement, the number of daily passenger flights between the US and China is set to more than double by 2012, from 10 daily flights to 23.

“We think China is going to be a great market in the long term,” says Larry Kellner, chairman and chief executive officer for Continental. “I’m not sure if it’s Beijing or Shanghai first from Houston, but we’ve (already) got 25 787’s on order. We’re always looking to grow at IAH.”

Carriers in Asia are also looking to grow at IAH.

China Airlines and Korean Air Cargo, who both recently started service to Houston, will soon be joined by another Asian cargo carrier at the airport. This month, Jade Cargo will begin twice weekly all-cargo flights between Houston and Shenzhen.

Reto Hunziker, vice president of sales and marketing for the airline, was quoted as telling the Asian media that Houston was just the better option for them in the United States. Rather than flying into other cities that are already saturated with Asian carriers at their airports, Jade Cargo opted for Houston, he said.

While both the US-EU open skies agreement and the US-China pact will undoubtedly increase international passenger traffic and possibly even reduce the cost to consumers, carriers continue to push for more liberal access into new markets. One such initiative is the push to develop an open North American Aviation market that would include the skies over the United States, Canada and Mexico.

Such a trilateral agreement would allow Air Canada to compete with US carriers for new international routes and would allow Aeromexico to launch flights between Houston and Toronto as well. In April of this year, representatives from each country agreed to start working on a plan that would establish some type of trilateral open skies agreement.

A finalized pact is expected to be approved within the next decade. Secretary Peters, however, believes that slowly but surely the aviation industry is inching towards a more modern, deregulated approach to air travel.

“We have an opportunity to set a new global standard for free and open trans-border air travel, and bring greater convenience and lower prices to shippers and travelers who want to reach places like Tucson, Toronto or Torreon,” she expressed after meeting with her Mexican and Canadian counterparts in April.

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