FOR IMMEDIATE RELEASE
Saturday, March 14, 1998
Contact: Bill Mosley
Tel.: (202) 366-5571
DOT 48-98
UNITED STATES, JAPAN HERALD
NEW AVIATION AGREEMENT
U.S. Secretary of Transportation Rodney E. Slater and Japanese Transport Minister Takao Fujii today signed a Memorandum of Understanding on aviation to expand immediately air services between the United States and Japan while setting the stage for further liberalization in the future.
At the signing, held at Washington Dulles International Airport, Secretary Slater hailed this as a dramatic leap forward for airlines, consumers and cities in both countries and a critical step in President Clinton’s successful liberalization of aviation service in the Asia-Pacific Region. The accord was concluded Jan. 30 in Washington, and has been provisionally effective since that date.
"Under President Clinton’s leadership, the United States has developed strong trading partnerships and liberalized aviation ties throughout the world," Secretary Slater said. "This agreement goes beyond a fundamental change in our aviation relationship with Japan to expand international opportunities and improved trans-Pacific service to all of Asia."
Slater added that the large number of applications for new U.S.-Japan flight reflects the long pent-up demand for services that the agreement makes possible. Currently, the Asia-Pacific region accounts for over one-third of the world’s international passenger traffic.
Secretary Slater noted that while the new agreement will liberalize U.S.-Japan services immediately, additional benefits will take effect automatically after four years if a fully liberalized agreement is not in place by that time.
The U.S. government estimates that, as a result of the agreement, U.S. passengers will enjoy gains of $1.2 billion over four years, measuring the value of additional service in a more competitive market. U.S. carriers will enjoy additional revenue of just over $4 billion over four years, due in part to an increase in U.S.-carrier market share. In addition, U.S. exports of aviation services will enjoy a net increase of almost $4 billion over the four-year period.
The agreement will remove all restrictions on the U.S.-Japan services of the so-called "incumbent" carriers -- currently United Airlines, Northwest Airlines and Federal Express -- who will be able to operate from any U.S. gateway point to any point in Japan and beyond Japan to third countries without limitation on the number of flights.
The agreement will allow the United States to designate two additional passenger carriers to serve Japan, one immediately and another in two years. In addition, U.S. carriers that serve Japan other than the incumbents -- American Airlines, Delta Air Lines and Continental Airlines, along with two new carriers -- will be able to add 90 additional weekly round-trip flights to their current total of 46. The three current non-incumbents, plus the two new-start applicants Trans World Airlines and Hawaiian Airlines, have applied for a total of 120 weekly round-trip flights. DOT already has granted temporary authority to American, Continental and Delta to operate an additional seven weekly flights each while it reviews applications for long-term authority.
The new agreement also will allow for the first time extensive code-sharing between U.S. carriers, U.S. and Japanese carriers, and U.S. and third-country carriers on services between the United States and Japan and beyond Japan.
Non-incumbent all-cargo carriers Polar Air Cargo and United Parcel Service will gain new operating flexibility, creating valuable opportunities to transport cargo to destinations beyond Japan. In four years, an additional U.S. all-cargo company will be allowed to open service to Japan and to a point beyond Japan.
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