intltravel90

Thinking about this article: http://www.nytimes.com/2012/11/21/op...avel-woes.html

The article argues that the US should lift restrictions on international carriers, which prevent them from operating domestic US routes (say, British Airways from IAD to STL).

I've searched and can't find any good counterarguments. Why is this policy in place? Is there a rationale beyond pure protectionism? When might it change? It would seem that it could only benefit the consumer, either by driving down prices or increasing quality.

cordelli

It won't change.

It's to protect the US carriers. Plain and simple. It's similar to the regulations on cruise ships sailing under foreign flags, to protect the few ships registered in the US.

There are probably other reasons, but since the US airlines fly over 2/3 of their flights within the US borders, you can imagine that there's little chance Congress will open that up to the rest of the world.

SirJman

You might be happy imagining BA/SQ/KE/OZ/NZ ect flying domestic US routes.

If something like this ever happened, you'll end up with Ryanair/Air Asia services, not BA/SQ.

Tide_from_PAE

If I'm not mistaken, the official reasoning for US airline cabotage laws is that US airlines are required to loan their aircraft to the US government in times of war for troop and supply transport. IIRC, the US may have used this law for flights to Kuwait during the First Gulf War.

CX flies JFK-YVR so it can carry O/D passengers. QF flies JFK-LAX, but one must be connecting to/from a QF flight to take it. EL Al flew the SME route at one time, but I seem to recall them founding a US-controlled airline to operate those flights and carry O/D passengers.

gosha83

I think the closest you can find is Virgin America, and the Virgin Group (Richard Branson) have a less than 25% stake in it. The way the US airlines fought Virgin's attempt to launch a US carrier demonstrates how protective they are of their foothold.

belfordrocks

It's already happened, it's called Allegiant and Spirit

tkey75

There's still room at the bottom.

clacko

it works the other way....us carriers can't fly europe/other countries internal routes...

fairviewroad

Precisely. The article ends by envisioning "hot towel service" on a Singapore Airlines flight from SRQ-CVG. What utter nonsense.

And while many domestic US routes have less competition than in the past, this sort of thing ebbs and flows. If the US market was opened up to foreign carriers, we'd probably see yet another carrier flying JFK-LAX, BOS-MCO, etc. Yawn. Small-to-mid-size markets would likely see little to no new service.

ralfp

Pan Am used to fly the Internal German Service (IGS) with a hub in Berlin. This was because West German carriers were not allowed to fly to Berlin. AFAIK the IGS routes were sold to LH and the rights sold to UA (not sure about that).

Does UA still have those rights (did it ever)?

cbn42

We probably won't see foreign carriers being allowed to operate domestic flights (unless the EU or a large country grants our airlines similar rights), but how about raising the maximum stake from 25% to 50% or more? That would give our airlines more capital, inject more competition, but still force the airline to remain chartered and based in the US.

pinniped

No. It is pure protectionism. It always has been. The law won't be changed anytime soon, either: it would quickly unite opposition from powerful senators from both parties and from states in every region of the US.

+1. At the highest end, you might get a two-cabin BA 763 operating a transcon but mimicking the existing domestic travel experience and fare structure from Day 1. Our market has repeatedly told the airlines what we expect from a domestic travel experience, and it's always rock-bottom fares, more frequencies (where/when the opposite choice is bigger aircraft), and a very basic premium cabin product. We won't yield enough to support an SQ A380 flying short hops around the U.S.

I don't think you'd see a Ryanair here...I think that kind of operation would just startup a new airline. Or maybe acquire someone like Spirit. (If we're assuming foreign carriers could fly domestically, I'm making the leap to assume that they could also invest in an existing one far beyond 25% and take a majority ownership that way.) Someone like BA or LH could make sense if it fed people to their TATL network in addition to selling the standalone transcon tickets.

But it's all moot...Congress isn't letting this happen. Probably ever.

intltravel90

Very interesting points.

I'm left wondering, though, how this doesn't violate anti-protectionist WTO clauses? Have complaints not been filed?

(Granted, the US regularly violates such things, but still...)

Often1

Because it's actual law in each country and has been on the books since way before aviation. Think travel by ship.

It's not as though BA can make a go of 4-class TCON when US carriers give away most of 2-cabin F.

So not sure elimination of cabotage would do anything that alliances don't already do.

maccoinnich

Not so; the EU-US Open Skies agreement allows US carriers to operate inside the EU. I don't believe any American airline has shown any actual interest in doing so, but they could.