Before his October retirement, former U.S. State Dept.
deputy assistant secretary for transportation affairs John Byerly oversaw many
Open Skies agreements, including the landmark EU-U.S. deal and a pact with Japan signed during his last week in office. Byerly last month spoke with BTN's Jay Boehmer about why he expects
more such agreements.
Business Travel News:
How many Open Skies agreements did you personally play a role in negotiating?
John Byerly:
There are different ways of counting them. We say right now that we have
negotiated Open Skies agreements with 99 countries. There are a couple of
agreements—Japan, up until recently, was one—where it wasn't being applied. We've
negotiated and initialed the text of an Open Skies agreement with the Israelis,
but it's not being applied and isn't in force. I guess I can take credit in
some sense for the 27 member states of the European Union. I personally
negotiated the German and French Open Skies agreements, and I played a role but
was not there for the finalization of the Italian Open Skies agreement. I didn't
do the initial set of agreements—the Netherlands in '92 or the smaller Western
European countries that were done in '95—but we pulled those all together
[under EU Open Skies]. Also, for many of the agreements, there wasn't exactly a
negotiating team. They were done by mail. We would exchange through the
diplomatic channel. Many countries were prepared to generally just sign up to
what we proposed in our Open Skies template, where there wasn't a lot of
negotiating room, but we would make adjustments or explain things. I think on
my watch, probably of the 99, I played a role in something like 75 of those
countries.
BTN: Are there
any that stick out as particularly difficult to achieve?
Byerly: Probably
getting the two stages of the EU Open Skies agreement—it took years. We started
essentially in 2003, negotiated in 2004 and didn't get there then. Then we
negotiated until 2005, but the [DOT] rulemaking exercise didn't work out; it
was withdrawn. Then we started in 2007 and were able to sign that year. We let
that sit for a year, went back to the negotiating table once that agreement
came into force in 2008, set the target date of November 2010 for the second
stage and completed that ahead of schedule. It was not an easy negotiation, but
it was a realistic one.
Also, the Japanese negotiations—this is not a country that
philosophically, until very recently, has endorsed full liberalization. It was
tough negotiating.
The first agreement where I led a formal delegation was in
Germany in 1996, and that was in many ways a breakout agreement. We had done
Open Skies only with somewhat smaller European countries—the Netherlands,
Belgium, the Scandinavian countries, Austria, Switzerland, Iceland. Germany was
interested in doing Open Skies, connected to an application by Lufthansa and
United for antitrust immunity. We put together an approach where we would
maintain the integrity of DOT's administrative law proceedings to decide
antitrust immunity but also took into fact that we would both get what we want:
We get Open Skies; the Germans get a decision by DOT to their liking. Now, that
doesn't mean DOT will deliver that, but they did in that case. That was a
little touch and go. It was new territory back in '96, and that was the first
one I had done.
We did some other agreements that weren't Open Skies, but we
built a relationship in steps over the years with the Russians. I've done those
negotiations for a number of years, and [the relationship] has met our carriers'
needs. We've really expanded the number of flights, in particular the number of
overflight opportunities, which is important with cross-polar routes and our
expanding service to Asian points. That is a real positive for our overall
aviation interests, to have a good relationship with Russia. A lot of countries
in Europe have had lots of problems, and we've basically been able to work
through problems cooperatively with Russia.
BTN: Which
nations were on the agenda for Open Skies when you left?
Byerly: We've
been having negotiations with China, where we have a commitment from 2007 to
achieve full liberalization—which for us means Open Skies. Those will be tough
talks. There are a lot of infrastructure constraints, slot constraints and
airspace issues with the Chinese. It's not going to be easy, but that's a huge
market and someplace where we'd like to liberalize. Brazil maybe offers opportunities in the nearer term. We have talks scheduled for a little later
this year. We'll see if those go well. We're also going to be having talks with
the Colombians, which is a huge market. [Columbia and the United States agreed
to an Open Skies deal on Nov. 11.] There are other countries where my successors
will be engaging.
BTN: Are there
any nations with which the United States has diplomatic relations but you don't
see the possibility of Open Skies?
Byerly: Never say
never. Where we've seen resistance to Open Skies, to liberalization, is with countries
where the carriers, which often are national flag carriers, are facing severe
financial or competitive problems. Countries often wish to protect their
airlines while [the carriers] get their act together. Sometimes, though, it's
hard to protect yourself into competitiveness. The Japanese realize that it's
best to move ahead and get with the rest of the world, and to get with the
competitive market rather than try to protect. Remember, the French denounced
our old agreement from the '40s, and we had no agreement for a number of years
in the 1990s, but we were able to patch something together in '98, then build
that with further agreements and ultimately get Open Skies in 2002. I would
never say never to any of these countries. Brazil is similar: We pushed for
many years, but their airlines were in a free fall for a while. Of course, the
landscape is very different now—no Varig, no TransBrasil, no VASP.
Mexico is another huge market where we don't have Open
Skies. First, they have to get their safety oversight up to International Civil
Aviation Organization standards, and they're making progress. When they do
that, maybe we can look forward and do liberalization.
BTN: What's next
on your agenda?
Byerly:
Retirement. That's what the State Department calls it when you've done 30-plus
years and you're old enough. They give you a small pension and send you on your
way. I could have stayed on, but I've been in this job 10 years in January. I
wanted to have a little more family time. I decided this was a good time—right
in the middle of an administration when there's not a political transition
going on. Also, we just finished the second-stage EU talks and signed that in
June, and I was just in Tokyo on Oct. 25 and our ambassador and the Japanese
transport minister signed the U.S.-Japan Open Skies agreement, which was sort
of a miracle of an agreement. No one, including me, thought that was going to
happen any time soon, but the commercial reality is airlines want to position
themselves for a global future. That includes the Japanese airlines,
particularly ANA, which wanted antitrust immunity with United. That's really
what set the stage for negotiations, which were tough. That was a neat way to
go out: My last week in the office, we signed Japan Open Skies.
This report appears in
the Nov. 29 issue of Business Travel News.