Well. Well. Well.
It looks like Air Canada is finally being managed. Could it be that Robert Milton has seen the future. Talk about a switch for Air Canada management. Proving, yet again, it takes an American to run a Canadian company. Congratulations to Robert Milton for standing up to those idiots running the true north strong and free.
Open skies to U.S. carriers, Milton urges
By ROMA LUCIW
Globe and Mail Update
Air Canada — under pressure from Ottawa to increase competition within the country's struggling air industry — called for an open market between Canada and the United States Thursday.
The Montreal-based carrier's proposal would open the door for American airlines to operate in the Canadian market.
Air Canada's call for an "unrestricted single aviation market" with the United States comes two days after Transport Minister David Collenette said Ottawa might be forced to reregulate the Canadian air industry if other ways to cut Air Canada's market share can't be found.
But Robert Milton, president and chief executive officer, said Air Canada's solution was a win-win situation, and blasted the government's demand that Air Canada stop matching prices with Canadian discount carriers.
"Lets throw this baby open to the most competitive market in the world and lets just get on with it and stop whining," Mr. Milton said in a conference call with analysts.
On Tuesday, Mr. Collenette had proposed capping the number of seats that carriers can offer on domestic routes. The minister also suggested cabotage — throwing the skies open entirely to foreign competition as an alternative to reregulation.
"This is not any different than what has been said before," Mr. Collenette said outside of the House of Commons in Ottawa Thursday "There appears not to be an interest on the part of the United States for a bilateral deal on modified fifth freedoms or on cabotage." Mr. Collenette said it took five years to negotiate the Open Skies treaty, the agreement the U.S. currently has with Canada.
In a letter sent to Mr. Collenette and his counterpart at the U.S. Department of Transportation, Air Canada said reregulation — if it involved any expropriation of market share, routes or assets — is not acceptable.
The problem with Air Canada's proposal, Mr. Collenette said, is that American airlines would only be interested in serving the major routes and not smaller Canadian communites.
"I don't think American [Airlines Inc.] or Delta [Air Lines Inc.] is going to serve Chicoutimi or Moose Jaw or Prince George, B.C."
But Mr. Milton said he had spoken with several large U.S. airlines, which were receptive to the idea of open competition.
And because the U.S. airlines have such big hubs, the possibility of adding more Canadian cities to the U.S. networks — even smaller communities — is increased, he said.
"I think the appetite will be there among the U.S. carriers in many quarters."
Mr. Milton said the first step would be to allow U.S. carriers to fly between points in Canada as long as they touched down in between at a U.S. airport.
Air Canada would get the same rights to carry passengers between U.S. cities as long as they travelled through Air Canada's hub in Toronto, or another Canadian city.
(The 1995 open-skies agreement between Canada and the United States allows airlines to fly to cross-border destinations only.)
In the long term, Mr. Milton would like to see a single open unrestricted market.
"The notion of ad-hoc selective reregulation just is not on, expropriations is not on," Mr. Milton said, adding that "I would find it totally unacceptable that this not be pursued because Minister Collenette has suggested it."
Since the recent demise of Canada 3000, Air Canada has been left in the dominant position of controlling 80-per-cent share of the Canadian air travel market.
Air Canada opposes reregulation and prepared Thursday's private sector suggestions to address Ottawa's concerns about its dominant share of the Canadian market.
"Post-Sept. 11, the world has changed. We have been talking about it but it's been a question of people shoving it in our face. But we are open to it, we are open to it. We are open to competition with anybody anywhere in the world, so let's bring on the biggest competitors in the world, the guys from the U.S. because I am comfortable that we win in that outcome," Mr. Milton said.