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Airline pushes open skies
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July 7, 1997: 8:45 p.m. ET
Northwest chief wants market to dictate U.S.-Japan air routes
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NEW YORK (CNNfn) - As the United States and Japan prepare to resume talks Tuesday on a so-called "open skies" agreement, one U.S. airline executive is urging the Clinton administration to avoid making concessions that could harm U.S. carriers.
The United States and several other countries have open skies agreement which give carriers in the nations unlimited rights to fly between each other's borders.
Proponents of such arrangements argue that they bring better service and more competitive pricing.
The U.S. and Japan have been negotiating air routes issues for the last four decades. The most recent talks broke off last August.
The major sticking point lies in the fact that the United States wants no restrictions on routes, capacity, pricing and entry while Japan wants two airlines in each nation to be granted more flexibility than their competitors.
One staunch opponent of the Japanese proposal is Northwest Airlines President and Chief Executive Officer John Dasburg.
The chief of the Minneapolis-based airline said he is proud that President Clinton has stuck to his insistence that open skies prevail.
"We advocate open skies between the U.S. and Japan and are hoping the administration sticks with this policy and doesn't abandon it in the case of Japan," he said.
Recently, Chicago-based United Airlines suggested they would be willing to trade routes they hold that go beyond Japan for more U.S.-Japan routes.
However, Dasburg finds that unacceptable because he believes Japan wants to cut into the business of U.S. carriers. That's particularly troubling, he believes, given the fact that U.S. carriers actually did $5 billion more in business last year with Japan than Japanese carriers did in the United States. (251K WAV) or (251K AIFF)
Given the more competitive nature of airlines in the U.S., Dasburg said a deal like that would hurt the industry much more than Japan's two main carriers, Japan Airlines and All Nippon Airways.
Speaking on the relationship between Northwest and KLM Royal Dutch Airlines, Dasburg said recent talks over the past couple of weeks have given him new hope.
The relationship between Northwest and Amsterdam-based KLM, which owns 19 percent of the carrier, has been strained since Northwest adopted an anti-takeover provision that caps KLM's stake at 20 percent.
Analysts have speculated that KLM may be trying to sell its stake since the new norm for alliances has shifted away from an ownership stake.
"KLM has said its first priority is resolving the differences between us. I'm hopeful we can do that and proceed. In the meantime, the alliance is doing well."
The airline is also in contract talks with its pilots who recently asked Northwest to agree to joint mediation.
Dasburg said Northwest is reviewing that proposal.
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