According to recent research, European consumers can find far better deals on airfare than can North American consumers. This is despite the fact that Europe has significantly higher taxes and fees on air travel.
In 1997, the EU instituted an “open-skies” policy, resulting in more routes, more airline competitors, and lower fares. The open-skies policy lowers airfares by creating a single aviation market among all member countries. The increased competition leads to greater choice and lower fares. The airline market in North America is more regulated than in the EU, and as a result, both the U.S. and Canada currently prohibit foreign-owned airlines from offering domestic flights.
While the United States and the EU signed an open-skies agreement in 2007, foreign airlines still do not have full access to the U.S. internal market. The U.S. retains some of the most restrictive laws on the foreign ownership and operation of airlines in the world, starving its airlines of capital and limiting their options for recovery, growth, and participation in a rapidly globalizing industry.
So what do you think? Should U.S. and Canadian policymakers follow Europe’s example and establish a true open-skies agreement? Or, more realistically, should the Canadian government pursue an open skies agreement with Europe on its own? In which case, I’m catching my next flight to Europe from Vancouver.
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