Two-Day 'Open Skies' Summit Underway In Beijing

Liberalization of air services between the United States and China is one of the US administration's top priorities in civil aviation as economic relations between the two countries continue to expand at a rapid pace, US officials say.

"Ultimately the goal is to do everything in our power to fully liberalize our aviation relationship with China, thereby expanding service, destinations and frequencies," Transportation Secretary Mary Peters said in a recent speech.

To that end, a US delegation is visiting Beijing on January 30-31 to restart talks on an "open skies" agreement with China.

Bilateral open skies agreements give airlines in both countries the right to operate air services from any point in one country to any point in the other, as well as to connect those flights to points in third countries. These pacts eliminate restrictions on air services with regard to frequency of flights, the type of aircraft and other aspects.

Previous negotiations for an open skies agreement with China, which began in April 2006, were suspended when the Chinese cancelled an August 2006 session over an unrelated issue. That issue has since been resolved, and the December 2006 Strategic Economic Dialog meeting in Beijing has given new impetus to open skies negotiations.

Andrew Steinberg, assistant secretary of transportation for international affairs, told the US State Department's news service, USINFO, "We are happy we are back at the table."

Steinberg is part of the delegation, as is Thomas Engel, director of the State Department's Office of Aviation Negotiations.

In 2004, the two countries reached a bilateral agreement to increase the number of US-China routes from four to nine with 249 flights by 2011.

"That's really a small fraction of what we need and what market potential would justify," Steinberg said.

Steinberg added a bilateral open skies agreement would bring huge economic gains to both countries. According to Transportation Department estimates, a single daily flight by a wide-body jet from a US airport to China generates about $213 million annually in economic activity.

But Chinese carriers, which are mostly state-owned, are pressuring China's leaders not to hurry with liberalization, according to a source close to the negotiations. Chinese airlines have a smaller market share of the two-way market than US carriers and are afraid to lose more if the market is fully opened.

US officials say China's rapidly growing aviation market would benefit from increased liberalization through increased investment, more jobs, greater consumer choice, technological advancements and improved levels of service.

Steinberg said the US aviation relationship with China goes beyond commercial air services. Bilateral technical cooperation, which covers air traffic, aviation safety and airports, has intensified in recent years. For example, the US FAA has provided Chinese civilian aviation authorities with help in their efforts to redesign China's air traffic control system, and with the certification of the first regional jet developed and manufactured by Chinese companies.

"We want to be a true partner with the Chinese," Steinberg said. "As world leaders in civil aviation technologies and services, we have a lot of expertise to share."

FMI: www.state.gov