Herein lies a fairly distinct difference between the US and Canadian
markets.
Canada's population is considerably more urban concentrated (highest in
the world next to Australia) than the US.
Canada doesn't have (many) cities on the size of Boise, Omaha, South
Bend. West of Ontario, the population of 10 million or so is highly
clustered around Winnipeg, Calgary, Edmonton and Vancouver. As a result,
each of these cities have the critical mass necessary to support direct
flights to other major centres and major trans-con destinations down
east.
As a result, outside of travelling between some smaller centres (i.e.
Kelowna, Prince George, Timmins, North Bay) and travel from the west to
east of Quebec City, most travel by most Canadians is done with direct
flights.
And oddly, Canadian's still have a stigma associated with crossing the
border. Many can't do it (no identification, have a criminal record, or
are not Canadian), won't do it (feel intimidated by big cities and big
airports), or won't tolerate it ("I live in Kamloops dammit and I
deserve subsidized air service by my government, why should I travel to
the US....")
So I'm not sure if a US airline would benefit from cabotage, though AC
would. Many think Toronto is in the US somewhere and are shocked when
presented with a Canadian Customs card.. ;-)
Matthew
> -----Original Message-----
> From: The Airline List [mailto:AIRLINE@LISTSERV.CUNY.EDU] On
> Behalf Of Addison Schonland
> Sent: February 21, 2002 8:03 AM
> To: AIRLINE@LISTSERV.CUNY.EDU
> Subject: Re: Cabotage
>
>
> Bob
> Would not the benefits really accrue to the Canadians here?
> They have the least amount of choice now. I bet more than a
> few people would fly YVR to YYZ thru ORD for a better price
> while AC charges more for the non-stop.
>
> -----Original Message-----
> From: The Airline List [mailto:AIRLINE@LISTSERV.CUNY.EDU]On
> Behalf Of RWM
> Sent: Thursday, February 21, 2002 5:12 AM
> To: AIRLINE@LISTSERV.CUNY.EDU
> Subject: Re: Cabotage
>
>
> Antoin,
>
> Going back to the Chicago Convention, every signatory nation
> agrees it starts with certain rights, one of which is control
> over cabotage. Over the years since, many nations have
> allowed layers of their trade "onion" to be peeled away
> -- and not just in relation to air services.
>
> The US has permitted substantial flesh, in terms of rights,
> to be traded away in this respect, to nations which do not
> offer comparable markets or the potential in the future for
> comparables. That's a call to be made by someone above my
> pay grade (though I would certainly hope to influence same).
>
> To the extent that new U.S. flag entrants like JetBlue
> continue to offer nonstop services in multiple frequencies
> at attractive prices, incumbents are disciplined and the
> consumer benefits. I see no way that allowing cabotage would
> substantially improve consumer welfare. For example, AC does
> not have the cost structure, while WestJet is focused
> elsewhere. In fact, were the growth of U.S. new entrants to
> be impeded by allowing cabotage, consumer welfare would be
> damaged, not enhanced
>
> To the extent that new entrants were no longer able to
> improve consumer welfare, the equation should be
> re-evaluated. That is not a present concern, and likely not
> in the foreseeable future, however. But it is one of the
> factors US DOT has historically viewed as important.
>
> To my mind, the airframe argument turns on dumping and
> subsidies than any other factor. Like steel, grain and many
> other commodities. However, air services
> are not presently in the WTO sphere of influence or control.
> (Not that WTO
> wouldn't like to gain control of air...)
>
> - Bob Mann
>
> Antoin Daltun wrote:
> >
> > Might there not be be benefits for customers? If there are not
> > customer benefits, then Canadian ventures can scarcely
> damage the US
> > airlines.
> >
> > Why should the US airlines have protection agaisnt cabotage
> anyway? I
> > can never understand why the US welcomes (insists on) free trade in
> > aircraft manufacture, but not in their operation.
> >
> > Antoin Daltun
> > ----- Original Message -----
> > From: "RWM" <RWM@RWMann.com>
> > There's no fair value trade for U.S. carriers in a
> > > North American common aviation area.
> > >
> > > - Bob Mann
> > > --
> > > - R.W. Mann & Company, Inc. >> Airline Industry Analysis
> > > Port Washington, NY 11050 >> tel 516-944-0900, fax -7280
> > > mailto:RWM@RWMann.com >> URL http://www.RWMann.com/
> > >
> > >
>
> --
> - R.W. Mann & Company, Inc. >> Airline Industry Analysis
> Port Washington, NY 11050 >> tel 516-944-0900, fax -7280
> mailto:RWM@RWMann.com >> URL http://www.RWMann.com/
>