More Variants of the MHD to Come?
Feb 8, 2001, 8:02 am
#1
FlyerTalk Evangelist
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Join Date: Sep 1999
Location: Toronto, Ontario, Canada
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More Variants of the MHD to Come?
One of the reasons western Canadians have the ability to do the MHD relates to the Fifth Freedom rights JL has between YVR-MEX. Because JL sets the reference non-stop fare between these two centres, all the other fares are built around this one. Which is why the ludicrously low fare exists at all. Could there be more MHD variants in our future, and particularly for those based in central Canada? Here is what the Transport Canada discussion paper writes about Fifth Freedom rights:
Negotiating Fifth Freedom Rights: Where the necessary fifth freedom rights are in place, a foreign carrier serving Canada can pick up supplemental traffic at a Canadian point and transport it to a third country or vice versa (the same applies for a Canadian carrier serving a foreign market). For example, a foreign carrier may decide to combine the U.S. and Canadian markets on a single flight, operating to a point in each country, with fifth freedom rights on the transborder sector. In situations
where the distance between bilateral partners is too great to operate non-stop service (e.g. on some transpacific services), countries sometimes seek fifth freedom rights at intermediate countries to augment third and fourth freedom traffic (i.e. traffic between the bilateral partners). In some cases, a carrier may not be able to offer a viable air service without exercising fifth freedom rights.
The granting of fifth freedom rights in most markets has generally been opposed by Canadian air carriers unless they themselves need such rights to facilitate new direct services of their own. Fifth freedom services by foreign carriers are frequently viewed as diverting an important amount of traffic from Canadian carrier services, traffic that sometimes may determine whether a Canadian carrier service is viable or not. Compounding the difficulty of these policy considerations is the fact that foreign countries may seek fifth freedom passenger rights in markets where Canadas third and fourth freedom rights are restricted, raising the prospect of a foreign carrier service where no direct competing Canadian carrier service is possible.
For instance, a European country could seek to obtain the right for its carrier to pick up traffic at a city in Canada and carry that traffic to a city in South America. If Canadas bilateral air agreement with the South American country in question does not provide for Canadian carrier access to the city of interest to the European carrier, then by granting fifth freedom rights to the European country Canada would be authorizing that countrys carrier to offer a service while Canadian carriers could not. In some cases, both Canadian air carriers and airport authorities will oppose a foreign carriers desire to gain fifth freedom rights out of concern that the services of third and fourth freedom carriers could be negatively affected.
With the evolution of international airline alliances and the development of new long range aircraft, demand for fifth freedom passenger rights by Canadas major carrier has declined. There are often few, if any, reciprocal rights of interest for Canadian
air carriers to offset the competitive impact of new foreign carrier competition using fifth freedom rights.
On the other hand, fifth freedom services could make a route more competitive to the benefit of travellers. Occasionally, without service by a fifth freedom carrier, there would be no direct service on a route. For example, Japan Airlines currently
provides service between Vancouver and Mexico City, a route not served on a scheduled basis by Canadian or Mexican carriers. The practice in the most liberal air agreements is to provide for unrestricted opportunities for fifth freedom services
elsewhere in the world.
Questions:
10.Should Canada have a more open approach to the negotiation of fifth freedom rights, and if so, in what circumstances?
11.What should be the primary policy consideration when a Canadian carrier opposes the granting of fifth freedom rights due to negative impact on its services but a Canadian community is interested in obtaining a new foreign carrier service made possible through the exercise of such rights? Should the existence/non-existence of a Canadian carrier service on the route in question be a consideration? Or should competition and consumer interest be the primary policy consideration?
So get out those keyboards and write Transport Canada. Participate in this review. Don't scoff at such an opportunity. 16-years ago a couple of us responded to a similar call for public comments from the Canadian Transportation Commission, appeared at their hearings across the country, and they agreed to permit Canadian airlines to establish frequent flyer programs. Within days, Aeroplan and the CP Air Frequent Flyer Program were both launched.
Negotiating Fifth Freedom Rights: Where the necessary fifth freedom rights are in place, a foreign carrier serving Canada can pick up supplemental traffic at a Canadian point and transport it to a third country or vice versa (the same applies for a Canadian carrier serving a foreign market). For example, a foreign carrier may decide to combine the U.S. and Canadian markets on a single flight, operating to a point in each country, with fifth freedom rights on the transborder sector. In situations
where the distance between bilateral partners is too great to operate non-stop service (e.g. on some transpacific services), countries sometimes seek fifth freedom rights at intermediate countries to augment third and fourth freedom traffic (i.e. traffic between the bilateral partners). In some cases, a carrier may not be able to offer a viable air service without exercising fifth freedom rights.
The granting of fifth freedom rights in most markets has generally been opposed by Canadian air carriers unless they themselves need such rights to facilitate new direct services of their own. Fifth freedom services by foreign carriers are frequently viewed as diverting an important amount of traffic from Canadian carrier services, traffic that sometimes may determine whether a Canadian carrier service is viable or not. Compounding the difficulty of these policy considerations is the fact that foreign countries may seek fifth freedom passenger rights in markets where Canadas third and fourth freedom rights are restricted, raising the prospect of a foreign carrier service where no direct competing Canadian carrier service is possible.
For instance, a European country could seek to obtain the right for its carrier to pick up traffic at a city in Canada and carry that traffic to a city in South America. If Canadas bilateral air agreement with the South American country in question does not provide for Canadian carrier access to the city of interest to the European carrier, then by granting fifth freedom rights to the European country Canada would be authorizing that countrys carrier to offer a service while Canadian carriers could not. In some cases, both Canadian air carriers and airport authorities will oppose a foreign carriers desire to gain fifth freedom rights out of concern that the services of third and fourth freedom carriers could be negatively affected.
With the evolution of international airline alliances and the development of new long range aircraft, demand for fifth freedom passenger rights by Canadas major carrier has declined. There are often few, if any, reciprocal rights of interest for Canadian
air carriers to offset the competitive impact of new foreign carrier competition using fifth freedom rights.
On the other hand, fifth freedom services could make a route more competitive to the benefit of travellers. Occasionally, without service by a fifth freedom carrier, there would be no direct service on a route. For example, Japan Airlines currently
provides service between Vancouver and Mexico City, a route not served on a scheduled basis by Canadian or Mexican carriers. The practice in the most liberal air agreements is to provide for unrestricted opportunities for fifth freedom services
elsewhere in the world.
Questions:
10.Should Canada have a more open approach to the negotiation of fifth freedom rights, and if so, in what circumstances?
11.What should be the primary policy consideration when a Canadian carrier opposes the granting of fifth freedom rights due to negative impact on its services but a Canadian community is interested in obtaining a new foreign carrier service made possible through the exercise of such rights? Should the existence/non-existence of a Canadian carrier service on the route in question be a consideration? Or should competition and consumer interest be the primary policy consideration?
So get out those keyboards and write Transport Canada. Participate in this review. Don't scoff at such an opportunity. 16-years ago a couple of us responded to a similar call for public comments from the Canadian Transportation Commission, appeared at their hearings across the country, and they agreed to permit Canadian airlines to establish frequent flyer programs. Within days, Aeroplan and the CP Air Frequent Flyer Program were both launched.
Feb 8, 2001, 7:04 pm
#4
FlyerTalk Evangelist
Original Poster
Join Date: Sep 1999
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I didn't think I was volunteering for this one, too. There really is nothing to it. Just put your thoughts down in answer to the questions after each section of the discussion paper. For starts, why don't people post their thoughts to the two related to this matter, then we can comment over the next week and maybe we can get a consensus together to send to Transport Canada. As far as formatting, I would think AC*SE can be our advisor here.
Feb 8, 2001, 7:36 pm
#6
Join Date: Mar 2000
Location: YVR
Posts: 9,999
In all seriousness, I'm not a big fan of the "fill in the blank" petition. It looks like what it is, and infers laziness or lack of interest, motivation, or effort on the part of the submitters.
I'm just going to think about it for a few days, then put my own thoughts down. If we want to share and/or discuss ideas, sure. But each submitting there own would probably carry more weight.
I'm just going to think about it for a few days, then put my own thoughts down. If we want to share and/or discuss ideas, sure. But each submitting there own would probably carry more weight.
Feb 8, 2001, 7:39 pm
#7
Original Member
Join Date: May 1998
Location: Canada
Programs: AC SE 2MM, HH Dd, SPG; IC Pl/A; AA; DL
Posts: 14,331
10.Should Canada have a more open approach to the negotiation of fifth freedom rights, and if so, in what circumstances?
Yes -- should be limited to international/transborder flights (ie not domestic flights)--prefer to see domestic market competition with domestic carriers.
11.What should be the primary policy consideration when a Canadian carrier opposes the granting of fifth freedom rights due to negative impact on its services but a Canadian community is interested in obtaining a new foreign carrier service made possible through the exercise of such rights? Should the existence/non-existence of a Canadian carrier service on the route in question be a consideration? Or should competition and consumer interest be the primary policy consideration?
The prime consideration should be the ability to create real competition not duopolies or monopolies.
Yes -- should be limited to international/transborder flights (ie not domestic flights)--prefer to see domestic market competition with domestic carriers.
11.What should be the primary policy consideration when a Canadian carrier opposes the granting of fifth freedom rights due to negative impact on its services but a Canadian community is interested in obtaining a new foreign carrier service made possible through the exercise of such rights? Should the existence/non-existence of a Canadian carrier service on the route in question be a consideration? Or should competition and consumer interest be the primary policy consideration?
The prime consideration should be the ability to create real competition not duopolies or monopolies.