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BENEFITS OF LIBERALIZED U.S.-CANADA AIR TRAVEL ARE OVERSTATED, PILOTS UNION SAYS

 BENEFITS OF LIBERALIZED U.S.-CANADA AIR TRAVEL ARE OVERSTATED,
 PILOTS UNION SAYS
 WASHINGTON, Dec. 13 /PRNewswire/ -- As trade negotiators gather in Denver to start talks on a new bilateral agreement for air transport between the U.S. and Canada, the Air Line Pilots Association is warning that while liberalization is a necessary goal, a recent analysis performed by the union shows that the benefits of liberalization have been grossly overstated.
 "The U.S.-Canada bilateral clearly needs to be updated and liberalized. There are some good opportunities for growth and additional jobs that we need to take advantage of," said Captain Randolph Babbitt, president of ALPA. "Our concern is that if our negotiators look for guidance in the analysis recently put forth by one of the special interest groups supporting open skies, they are going to enter the talks with a wildly optimistic view of how much we might gain under liberalization. Our concern is that they could end up giving away the store in exchange for an inflated set of benefits that will never materialize, or even go so far as to commit to the granting of cabotage rights, which clearly would be counter to our national interests," he said.
 Babbitt was referring to a study published earlier this year by USA-BIAS (U.S. Airports for Better International Air Service). This study claimed that a highly liberalized U.S.-Canadian bilateral agreement would have produced an additional $9.3 billion in economic benefits to airport communities and an additional 210,000 jobs (including 5,800 in aviation) for both countries.
 An analysis by ALPA revealed a much lower level of benefits. ALPA calculated a trade increase in the range of only $820 million to $1.6 billion annually, and only 18,500 additional jobs, with less than 700 of those being in the airline industry. The ALPA report blames the discrepancies on a number of technical flaws and erroneous assumptions in the USA-BIAS study. For example, USA-BIAS did not account for the fact that the recession that hit the U.S. and Canada in the early 1980s lingered much longer on the Canadian side of the border. It also overstated the relationship between trade growth and air travel growth, ALPA says.
 "Our message to the negotiators is simple: Come back with a liberalized bilateral, but make it a fair trade. With some 30 percent of the U.S. airline industry's capacity in bankruptcy or tottering on the edge, and the industry suffering its first significant decline in traffic for more than a decade, we don't need to be giving away access to our markets," Babbitt said.
 -0- 12/13/91
 /CONTACT: John Mazor of the Air Line Pilots Association, 202-797-4060/ CO: Air Line Pilots Association ST: District of Columbia IN: AIR SU:


TW -- DC011 -- 2441 12/13/91 14:43 EST
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Date:Dec 13, 1991
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