<p>"Obviously, a joint venture is predicated upon antitrust immunity, and antitrust immunity is predicated upon Open Skies," Air China vice president and general manager of North America Zhihang Chi told attendees here at the Phoenix Sky Harbor International Aviation Symposium this month. While Chi cited as a key barrier visa issues between the two countries, others have pointed to a protectionist stance taken by the Chinese government in allocating to U.S. carriers takeoff and landing slots at Chinese airports.</p>
<p>"Why is there not going to be Open Skies?" Chi asked. "Because we don't need it. Today, we have so many unused frequencies, and obviously that's a whole ball of wax. The reason we have so many unused frequencies is because we cannot get visas for Chinese folks, so they can't travel to this country."</p>
<p>Chi claimed the United States is the most desired destination for Chinese travelers, but China is not included in the U.S. Visa Waiver Program, which allows U.S. visitation for 90 days without a visa. "Without any visa liberalization, we don't have enough passengers to fill our airplanes," Chi said.</p>
<p>During a live poll of nearly 100 aviation professionals attending the symposium, 47 percent expected within 10 years the completion of an Open Skies pact between the United States and China. Others were less optimistic.</p>
<p>Session moderator and former U.S. State Department deputy assistant secretary of transportation affairs John Byerly, who prior to his retirement last year played a role in negotiating many of the roughly 100 U.S. Open Skies agreements, pointed to the difficulty in attaining a deal with China. "One smart decision when I was l leading negotiations in the State Department was I delegated the Chinese negotiations in every case to someone else," he joked in an exchange with Chi. "You're too tough."</p>
<p>On the contentious issue of U.S. airline slot access to Chinese airports, Byerly in an email to <em>BTN</em>wrote: "China has given no sign of being interested, in the near term, of moving to an Open Skies agreement, citing the fact that Chinese air carriers have ample frequencies in the existing 2007 agreement to expand their services. Chinese representatives have repeated long-standing criticisms of U.S. visa policy as a barrier to competitive equality, a view that the U.S. government does not share. In the next year or two, the biggest challenge for U.S. airlines is more about obtaining commercially viable slots for the frequencies they already possess than about gaining new frequencies."</p>
<p>The slot issue last year was exemplified by the <a href="%20http://www.businesstravelnews.com/Business-Travel/Airline-News/Articles/AA-Finally-Readies-Chicago-Beijing-Service/">troubles American Airlines had in launching its first flight from Chicago to Beijing</a>.</p>
<p>Reconciling the disagreements now is a task for <a href="%20http://www.businesstravelnews.com/Business-Travel/People/Articles/Aviation-Negotiator-Urs-To-Replace-State-Dept--s-Byerly/">Byerly's successor, Kris Urs</a>. During the Phoenix symposium, Urs told attendees he expects to sit down with his Chinese counterparts in August "to discuss our civil aviation relationship."</p>
<p>"When we look at the passengers who depart the United States each year, about 70 percent now go to Open Skies partners," Urs said. "Still, 30 percent goes to non-Open Skies partners."</p>
<p>Representing the largest chunks of that 30 percent are Mexico and the Dominican Republic. Urs noted that the United States also has no Open Skies deals with Russia--"one of the large, emerging economies that some day we might like to get" signed up--and South Africa. China rounds out the five biggest markets without U.S. Open Skies deals.</p>
<p>"We hit 100 agreements, but we hit 100 agreements in 18 years," Urs said. "There are still a significant number of countries that are candidates out there. We're open to all takers."</p>
<p>In the meantime, the largest global alliances have bulked up their Chinese presence. For example, Taiwan's China Airlines and Shanghai-based China Eastern last year agreed to join SkyTeam, whose members also include Guangzhou-based China Southern. Oneworld members, meanwhile, include Hong Kong's Cathay Pacific and its sister airline Dragonair.</p>
<p>Those carriers can go only so far with their U.S. partners, Air China's Chi noted. "This alliance thing is probably the funniest, weirdest creature that there ever is," he said. "If I'm comparing alliances to a relationship, we can look, we can touch and we can probably go even further than that, but we can't talk"--at least in the absence of antitrust immunity.</p>
<p>"Within any alliances, we compete," he continued. "We don't have antitrust immunity. If we don't compete, we literally go to jail. That's for real. Our best partner is also our worst competitor. In our experience in the United States, we compete head-on with United."</p>
<p>The article originally was published in <em>
<a href="%20http://www.businesstravelnews.com/Business-Travel/Airline-News/Articles/Slots,-Visas-Stymie-U-S--China-Open-Skies/">Business Travel News</a>
</em>.</p>