Benefits of Open Skies For British Columbia and Canada

Opening up international air access to Western Canada is integral to the success of Canada’s Pacific Gateway. The role of Canadian airports as preferred connections between Asia and North America requires effective, streamlined policies and programs.

Airport TerminalIn the Speech from the Throne given in Victoria on February 16, 2009, the Lieutenant Governor stated on behalf of the British Columbia government that we desperately need an Open Skies policy. To promote Open Skies, the Lieutenant Governor invited governments, international airlines, airport managers and businesses from across Canada and around the world to an Open Skies Summit in order to send a message that in the new world economy we all need direct, unfettered air access to our key customers.

This 2009 British Columbia International Open Skies Summit was held on September 24-25, 2009, at the new Vancouver Convention Centre. The Summit showcased the need for a national Open Skies Policy, as international air access is fundamental to global economic success.

The Summit was attended by leaders from Canada and around the world representing governments, industry, Canadian and foreign airlines, the airport community and academics specializing in international aviation and economic policy. A Declaration on Open Skies was signed by Premier Campbell, Premier Stelmach of Alberta and Minister Cheveldayoff on behalf of Premier Wall of Saskatchewan. These jurisdictions will now coordinate efforts to ensure Open Skies for western Canada.

Sunset TakeoffBritish Columbia welcomed Canada’s 2006 Blue Sky Policy which appeared to call for Open Skies in all Air Service Agreement (ASA) negotiations. ASAs are negotiated trade agreements that set out terms for scheduled commercial air services between nations. ASAs can include restrictions on the airports that can be served, airfares, flight frequencies, seat capacity and the designation of air carriers. The less restrictive an agreement, the more liberal or "open" it is considered to be. An Open Skies agreement effectively enables market forces to direct the commercial decisions of air carriers, without interference from treaty restrictions. Open Skies would, at the very least, allow international air carriers to freely transport passengers and cargo to and from Canadian airports of their choice.

LandingOf Canada’s 88 existing ASAs, only eight are classified as Open Skies (Barbados, Dominican Republic, Iceland, Ireland, New Zealand, South Korea, United Kingdom and the United States). A recent liberalized ASA with the 27 member European Union has the potential to become an Open Skies agreement if both signatories take specific regulatory steps. Progress toward Open Skies in the Asia-Pacific has, however, been slow. These ASAs contain restrictions that do not allow western Canadian airports to compete with their US and central Canadian counterparts for air travel and commerce from other countries. The lack of full and open access to international air markets represents significant costs and lost opportunities for Canadians.

In 2008, the Ministries of Transportation and Infrastructure, Tourism, Culture and the Arts and Small Business, Technology and Economic Development, in conjunction with Vancouver International Airport, engaged the International Institute of Transport and Logistics (IITL) to conduct a comprehensive review of the Open Skies issue.

A final report with appendices has been prepared and key findings include:

  • Canada has failed to keep pace with global trends towards air liberalization.
  • Open Skies agreements, where implemented, have had significant positive effects on the economies of the nations involved.  Traffic growth has generally averaged between 12 and 35 per cent.
  • Failure to negotiate Open Skies agreements will result in the loss of key economic benefits to British Columbia and Canada. 
  • Open Skies agreements with new markets are critical to address a growing competitive disadvantage with the United States.
  • Canada needs to pursue policies to address the facilitation of international passengers, including Approved Destination Status (ADS) with China and allowing transit without visa for Chinese citizens. 

IITL estimates the following benefits of possible Open Skies agreements for Canada:

  • Canada-Korea Open Skies:
    • 37.7% increase in passenger volume (Seoul-Vancouver) in first few years, with a longer term increase of 62.5%;
    • Airfare reduction of 15% in the first year;
    • 71.5% increase in flight frequencies (Seoul-Vancouver); and
    • $200 million annual impact on the Canadian tourism industry, 75 percent of which would be focused on BC tourism.
  • Canada-Japan Open Skies:
    • Long term passenger volume increase of 15.8% with airfare decreases of 10.6%;
    • Expected increases on the Tokyo-Vancouver route alone would have an annual $54 million impact on Canadian tourism.
  • Canada-Hong Kong Open Skies:
    • Reduction in average airfares of 9%; and
    • Increase in passenger volumes by 15.2%.