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Canada doesn't sign up to airline liberalization policy statement

MONTEBELLO, Que. - Canada says it needs more time, but seven countries and the European Commission have signed an airline liberalization policy statement.

MONTEBELLO, Que. - Canada says it needs more time, but seven countries and the European Commission have signed an airline liberalization policy statement.

Following a summit in Montebello, Que., the parties signed the multilateral statement that aims to ensure the financial sustainability of the global airline industry.

Signatories include the United States, Chile, Malaysia, Panama, Singapore, Switzerland and the United Arab Emirates, which represent about 60 per cent of global aviation traffic.

Canada was not among the signatories because it needed more time to evaluate the process, said Giovanni Bisignani, director general of the International Air Transport Association.

"This is an historic achievement that will help set the foundation for a financially sustainable global aviation industry," he said in a news release.

Bisignani said the policy statement sends a strong message and marks the beginning of a drive to develop a more liberalized airline industry.

The Montebello summit followed an inaugural meeting last year in Istanbul.

The policy principles aim to reduce national restrictions that prevent access to capital markets, restrict the ability to fly into countries, and set airline prices above market levels.

The 65 year-old bilateral system of air service agreements restricts how airlines can do business in ways that no other industry faces, he said.

While most industries have a couple dozen large global competitors, there are more than 1,000 airlines around the world. National ownership requirements prevent mergers and the development of global players.

Bisignani said the world has changed since airlines were largely state-owned and restrictions made sense.

The industry has lost US$53 billion since 2001 and continues to be harshly affected by the global recession. Losses are expected to exceed US$11 billion this year and US$3.8 billion in 2010.

"We don't want government handouts. What is important is that we have a level playing field and the freedom to do business that every other industry takes for granted," he stated.

IATA represents some 230 airlines comprising 93 per cent of scheduled international air traffic.

An association-commissioned study in 12 markets concluded that liberalization of market access, ownership and control would increase gross domestic product by nearly one percentage point or US$67.7 billion, generate 2.4 million jobs and reduce average fares by 16 per cent.