Canada-U.S. deal expected to increase air travel choices

Canada and the United States have agreed to an air travel deal that's expected to create more competition for airline carriers and provide greaterflight choices and cheaper faresfor passengers.

The new Open Skies agreement, whichtook effect Monday,will let Canadian passenger and cargo carriers use the U.S. market as a platform to serve a third country and vice-versa.

That means that a Canadiancarriermaking a stopover at a U.S. airport, for example,can now pick up passengers and take them tothe flight'sfinal destination in another country, which previously was not permitted.

"Our new aviation relationship will stimulate stronger partnerships, innovation, more choices and lower prices, to the benefit of both of our citizens and both of our countries," U.S. Secretary of Transportation Mary Peters said in Washington, D.C.

"The time is right for this agreement," said Canadian Transport Minister Lawrence Cannon, who was in Washington for the announcement.

Flightsbetween Canada and the U.S. were previously governed by a1995 air transportation agreement, whichrestricted Canadian and U.S. air carriers' access to each other's international markets.The new Open Skies agreement lifts that restriction.

"We saw that increased competition could lead to lower prices following the 1995 agreement, as it created a more creative and open regime for operations in the transporter market," Cannon said. "We areoptimistic that today's agreement will provide similar benefits in our respective international markets."

Under the Open Skies agreement, air carriersof both countries will alsobe able to:

• Operate stand-alone all-cargo services between the other partner'sterritory and a third country.
• Offer the lowest prices for services between the other partner's territory and a third country.

The new agreement does not allow a U.S. carrier to carry domestic traffic between Canadian cities or vice versa, a practice known as cabotage.

Canadian and U.S.transportation officials willmeet with their Mexican counterpart to bring that country into the agreement as well, the CBC's Henry Champ reported. There are European Open Skies agreements as well, and Canadian and U.S. governments want open skies with the rest of the world, he said.

Transport Canada estimates that the Canada-U.S. air transportation market generated about 19.8 million passengers in 2005, making it the largest international air transportation market in the world.