The Sky Is Open, Except Where It’s Not

The Nine Freedoms of the Air are one of the most fascinating (and quietly political) frameworks in global aviation. They define what airlines are allowed to do when flying between countries, and they shape everything from ticket prices to whether Dallas gets a nonstop to Dubai.

But look, see, in aviation, freedom's just another word for restrictions with diplomatic paperwork. The Nine Freedoms are the rulebook for who gets to compete, and who gets locked out in a sky full of negotiated corridors.

Matt Cornelius is Executive Vice President of Airports Council International - North America (ACI-NA), and return guest to No Show. The "Airport Whisperer" tells us what are they, what they mean, and why they exist. Plus the return of our favorite word. That's right...it's cabotage!

Transcript

Meet The Airport Whisperer

Matt Brown 0:09

Hi everybody, it's No Show. Our guest this week, Matt Cornelius, is a senior aviation industry professional and the executive vice president of Airport Council International North America, ACINA, an organization that represents commercial airports in the United States and Canada. He's known by loyal friends and sworn enemies as the Airport Whisperer, a master of the dark arts that gets planes, airports, regulators, and international partners aligned, no small task. He is fluent in airports and Washington policy. He joins us today to talk about the nine freedoms of the air, a concept I had never heard of until last year when Jeff mentioned it to me. And it's the kind of thing that feels like it should be featured like in a short film from the 1950s that you have to watch in elementary school, brought to you by like the Rotary Club, Pan Am and the Concrete Industry of America. And I'm probably not too far off from the coalition that actually brought the nine freedoms of the air into being. So today, the nine freedoms of the air, what are they? What do they mean? Why are they here? I ask those questions about a lot of things in my life, and especially on this show, but today we're going to stay focused on the freedoms. Matt Cornelius, welcome back to No Show.

Matt Cornelius 1:26

Thank you, Matt. Great to be here again. And uh I think uh that was mostly the nicest intro I've ever had.

Matt Brown 1:32

90% the nicest intro.

Jeff Borman 1:34

You already said you wanted to stay focused, and I'm going back. I want to know who are his sworn enemies.

Matt Brown 1:41

They know. They're out there.

Jeff Borman 1:45

The the the nine freedoms of the air are one of the most fascinating and quietly political frameworks in global aviation. That exhausts my knowledge on the subject. They define what airlines are allowed to do when flying between countries and they shape everything from ticket prices to whether or not I'll get a Dallas to Dubai nonstop.

Chicago Convention And ICAO Origins

Matt Cornelius 2:05

So I'm gonna I'm gonna take us back a little. Um if you think about it, and it's it's about 80 years old, so your uh idea of a 50s film isn't is not far off. Uh, you know, a lot of error, air aeronautical development happens because of basically, you know, after World War II was coming to a close, uh, you know, the the countries, the the Western countries basically said, Well, we've developed all this aeronautical technology, let's use it for commercial purposes. And so the issue though was there were no rules. And there were rules within countries, but not between countries. So the US and several other Western countries basically got together and said, let's agree on how this system is gonna work. And uh basically what they formed was I what's called IKAO, which is a UN arm of um uh the aviation arm of the UN that basically governs international aviation. So so the US led it, um, and they actually had a convention. I think it was 54 countries actually made it to Chicago in 1944, which is a actually a pretty big feat, and they wrote the the laws, the rules of of international aviation. So there's a lot of different pieces of that. One of the things that came out of it was these freedoms. Um, and and the freedoms really dictate uh what is and isn't possible when you're having international air travel.

Matt Brown 3:26

How like who led that charge? Did America kind of come in and say, okay, you know, the war's winding down? Hey, everybody, let's all get in a room and let's talk about how commercial flight is gonna work.

First And Second Freedoms Explained

Matt Cornelius 3:38

It's exactly right. Um, so uh, you know, the US is really the the leader in aviation. Uh, we created aviation at Kitty Hawk. And I know the Ohioans may uh disagree with that a little bit, but uh but but you know, we started it and uh we've always led it. And that's actually one of the issues now is that uh, you know, can we hold on to our you know superiority in in aviation? And you know, Europe and and China and others are are challenging that, I think. Um but but in any event, um, yeah, the US basically said we need to have rules, we want to have international air travel. Um and and you know, when I say air travel, I'm including cargo too, because actually a lot of this is driven on the freight side. Um they use the more liberal as we call it, uh, the higher number of freedoms you go, the more liberal your your agreement is. Um they use that far more than the passenger side of it. Um so but but yeah, so they I mean in the US basically said we need to have uh an agreement on this. It was called the Chicago Convention. It's a 114-page document um that spells out you know what you can and can't do, uh what's agreed to. And and so now uh that turned into IKO, the International Civil Air Aviation Organization, starting UN. It's based in Montreal. I think it has 190 countries that are that are signed up, basically. But uh when they sign up, they agree to abide by the foundation, the Chicago Commission. Uh, and then you know there's a lot of work uh to modernize and respond to changes, you know, new technologies and wars and other problems. But uh but basically that's that's where everybody goes hash out their their issues between countries.

Jeff Borman 5:15

So the first two freedoms are basically diplomatic currency. The first is to fly over another country without landing, and the second is to land for technical reasons, fuels to repairs, but not to pick up passengers. Right. These are is it widely granted uh just because of modern ADV aviation?

Matt Cornelius 5:32

Yeah, but it, you know, they're uh you can kind of gloss over them, but they're super important. You know, the issue is without uh sort of that grant of rights, uh country could shoot down some plane that's flying over its territory, right? It doesn't have the permission to be there. And uh, you know, we had an incident in El Paso a couple weeks ago, and I don't know what happened there, but bottom line is the U.S. government didn't like what was flying over our airspace. The the Chicago Convention starts with the principle that a sovereign nation owns its airspace. And it's a lot of this comes from maritime, and I don't know a lot about maritime, but they had to do this, you know, the ocean and transport and all that. So none of it's like new, but it's just adopted to aviation. So but but the privilege to fly over is a really important one. And actually, right now, the FAA and the US government has banned the overflight uh of Russia. You know, the minute the war started, they closed the airspace. So no US certificated aircraft is allowed to fly over. So first freedom rights with the Russians are gone. Um and that's uh may not sound like that big a deal because we don't have a lot of people going to Russia, but we have a lot of people going to India, and we have a lot of people going to Hong Kong and Singapore, and um that's that's a a very expensive and uh challenging problem for those carriers trying to do it. Now, uh other countries uh don't have that ban on Russia. So uh Chinese carrier is a good example. They fly over Siberia to get to the US. Uh they're they're getting a two or three hour advantage because they have first freedom rights with Russia's and uh and can access the US um in a much faster and cheaper way. Um so so it it sounds like kind of no big deal, but um, but uh overflying a country without getting shot down is is a pretty big deal. And then you you know the other piece is that if you think about the geography of the world, uh Canada and Russia own the top quarter of the planet. You know, it's a lot of power that they have for the Russians. It's a lot of money that they get. Um, because with coming over with that, right, the countries do have the right to charge for the service. So most countries uh charge an overflight fee uh for every every aircraft that transit. Um the Russians used to have a special system where uh you could pay for an express route. Um, and uh, you know, we the US territories were kind of banned from doing that, but other countries did pay it. And, you know, these royalties, as they were kind of known as, uh, were very, very expensive. Um so you know, it seems sort of basic. Uh it's a tremendous amount of power that each country has in terms of uh allowing uh whoever to fly over their their territory.

Matt Brown 8:07

Like how much are we talking about for a flight? Are we talking about like a thousand dollars? Are we talking about like $10,000 if you fly over? Like what's the what's a what's a no what's the number there?

Matt Cornelius 8:17

Yeah, so I I don't I don't know off the top of my head, but I can say that it's significant material. Um we're uh you know having at the moment the US and the Bahamas are having a little bit of a spat because they changed their um and there's there's a lot to dig under the surface here, but the the Bahamians use the FAA for a lot of their traffic. So you know the FAA is providing the service and then the Bahamians are charging for the service that the FAA is providing, and the fees are are quite high. Um again, going back to the Russia example, I I don't know the exact numbers, but these express uh trends uh you know, sort of along the top of the Russian territory, you know, we're we're millions of dollars per flight for the year, right? But um, you know, I know the European carriers to get from you know London to Hong Kong, which is a very profitable route, uh, you know, it costs to go around Russia a lot of money. Uh so the Russians priced it just in a way that, oh, if you want, you know, you want to save, you can get a you know, 5% savings by paying us instead of paying fuel charters or whatever. Um so no, it's significant and it's and it's significant um revenue for the countries. I mean, the US gets a lot of overflight fees that goes into funding our system. Um so uh you know, it is used. There, there is a responsibility too that comes with it that that um kind of speaking to the second freedoms, uh, when you grant the rights for overflight rights, um, you also agree to provide emergency services. So again, in that Russian territory, if you've ever flown uh to Hong Kong is a great example. Uh, if you looked out the window over Siberia, it's pretty, pretty, uh, pretty bleak out there. But if you were to have a problem, there are emergency airports that are prepared to respond to a commercial aircraft, large commercial aircraft coming in with an emergency. And so theoretically, some of that money that they're paying uh supports those services to make sure that uh you can transit the the the uh the route safely.

Overflight Bans, Fees, And Power

Jeff Borman 10:14

These don't sound like freedoms, they sound like privileges. Like freedom, freedoms would perhaps be uh the absence of any of these rules.

Matt Brown 10:25

Yeah. Yeah. I mean, though it's very it's perfect for the branding of the era, like like freedom bonds.

Speaker 2 10:33

And yeah, but it it sounds like these things can kind of come and go with uh with some frequency.

Third And Fourth Freedoms In Practice

Matt Cornelius 10:41

Yeah, uh yeah, they're they're pretty steady. I mean, first and second, and and to to be clear, we haven't the US and Russia are are we have an air transport agreement with them. Um, it is dormant more or less. But um basically the FAA has papered over all of this stuff with a nodum, which is a whole nother thing, but basically like a technical message to aircraft operators that says, we're we've closed this airspace. So it's not they we have questions say, hey, we're stripping this out. Um they just they just technically kind of went around it. But um, but yeah, no, it's it's not you know, it's it's rights and privilege, and and you know, it's evolved. So, you know, we have this start in 1944, and you know, countries were nationalistic and protectionist, and um, so you know, they were very careful about how uh they allowed other countries to access their markets. And so that's it, it's a good segue into third and fourth freedoms, which are really where passenger traffic um starts to come come into it, um, and you know, in a kind of point-to-point way. Um so third is, you know, third and fourth are basically what everybody's used to. Um, you know, you get on United from Washington and you fly to London. That's a third freedom uh to fly people to another country. Fourth freedom is to fly people from another country back to your home country. So that's what everybody sort of um so I think it's important to also back up a little bit and say like this is the framework of what's possible. Um each country has to negotiate what its deal is gonna be with every other country, right? So um back in the 60s and 70s, jets started to come about and they had longer ranges and it became possible to actually do that sort of route. Uh and so you know, the US would go to individual countries like the UK and say, hey, we want you know our carriers, TWA and Pan Am at the time, we want them to be able to fly to London. And the UK would say, okay, well, let's have an agreement. And uh if you can have uh five flights a week from five cities in the US to Heathrow, and the British Airlines can have five flights a week to five cities in the US, and they were was spelled out Boston, uh, New York, Philly, Washington, Chicago, Miami, I think. Um, and and so they they had these agreements with and it had third and fourth rights, but then you know it was further defined, like you know, which carriers are authorized. So um, you know, there's all different iterations we can do, but everyone started out very conservative. And and sort of as time went on, uh, you know, people saw the economic value of international air travel. And again, not to forget the cargo side of it, you know, at some point early in the 80s, uh, and it was actually airport of US airports that uh said, this is crazy, right? We're why are we limiting opportunities to just these very narrow airlines and cities and number of flights and all that? You know, up until that point, basically, you know, the airlines have been nationalized, but the airlines, uh, the government basically only listened to the airlines. So, you know, TWA was in there saying, Hey, we'd like we'd like another Heathrow flight, but don't give Pan Amino, right? And definitely don't let Branoff have any. And so the US government was sort of kind of hemming and hawing with this. And and a group of US airports basically lobbied the the US government and said, you know, this is uh super important to our our communities. Why don't you listen to us as to what we want instead of what's commercial operators? And so they did. They basically, you know, over a little bit of time in the late 80s and then early 90s, uh came to think about what these other freedoms were and what they offered. And so um it it gave rise to the first open skies agreement. Um and so open skies uh loosely is a air traffic agreement between two countries or multiple countries that has at least fifth freedom traffic. So again, we haven't talked about fifth freedom, but fifth freedom basically is uh the ability to uh carry traffic uh to a third party country. Right. So uh the best you know, really good examples, I think, still going on today is Emirates. They are clearly a UAE carrier. Uh that's where they're um based and nationalized certificated. That's the key. They fly uh JFK to Milan to Dubai flight, and that they can sell tickets just to JFK to Milan. And that's that's the fifth freedom, right? That's a third-party country. You know, the the some of those people are never going to the UAE. They may be surprised they're flying on a UAE carrier, but they're able to sell it because the US, the UAE, and the EU have an agreement, an open skies agreement that includes fifth freedom traffic rates. Um so 1992 was the first one, it was actually with the Netherlands and Delta um had basically and Northwest had successfully joined kind of with the airport and said this is something we're interested in. It also came along with joint venture uh antitrust immunities, which uh is a is a big piece of this. So the US policy is basically basically has allowed for international antitrust immunity so airlines can align with each other uh as long as the countries that they're serving, the places that they're serving, all have open skies agreement. So again, so fifth or more liberal sixth, seventh, eight, ninth, which you know, we can we can get into that's a whole different all of wax. But basically, um, you know, we we we have those uh level of rights with all of those countries. And so Delta Northwest uh started this joint venture, US Netherlands started this open skies agreement, and we went from in 1992 that one agreement to now it's like 138 or 142 or something countries that the US has open skies with. And and basically, you know, when countries approach us, we don't want to talk about anything that's not open.

Jeff Borman 16:45

It's kind of surprising in that example that uh Alitalia would have allowed that, especially in a pre-EU governance, right? I think you said it was early 90s. So I mean now the EU kind of well messed it up or helped it, depending on your perspective. But no, the the antitrust thing is kind of interesting though, right? Uh that in nearly any other market, private enterprises would be blocked from doing these things. Right. From like most of these free, not maybe not most, but a lot of these freedoms, and especially when we get to the end when we talk about cabotage, that is essentially a monopolistic approach to you know, protectionist approach. Uh, but because it's government-issued, that's not actually antitrust, right? It's just as part of what a government's allowed to do. They can restrict radio bandwidth and television bandwidth and uh the right to fly over my country.

Matt Cornelius 17:31

And auction it off for huge sums of money, right? But no, no, no. And so actually, Europe really is, I mean, in all of this, uh, you know, we started it in '92. Um, and we had individual open skies agreements with UK, with France, with, you know, countries all over the place. And then uh, you know, the European Union formed, and they really leapfrogged in terms of what they did. So they have uh all the way up to nine freedoms within Europe, right? They they really created a community. We we treat our relationship with the EU as one now, right? We have a US EU air transport agreement. It's got uh you know, basically fifth freedoms. We don't do sevenths with them, I don't think, but but um it's it's considered open skies. But within the EU, those are all still individual countries, right? And and you know, the EU is sort of uh, you know, manufactured political uh apparatus that's been layered on top of those individual countries. So, you know, carriers over there, Air France is still a French carrier, the French Civil Aviation Authority issues them a certificate. Um, and you know, uh that's but they're considered they're considered you know France, French, 100%. But because of the EU setup, they've created a uh what they kind of call a community uh aviation sector where it's all one, right? The 27, 28 uh states of the EU plus a couple of others, uh you know, treat it as like the US. So Air France can fly a flight from Amsterdam to Rome, and you know, it's consider it would be the same as KLM or Al Italia doing it, ITA now.

Jeff Borman 19:12

You mentioned earlier the you used the word sovereign, and ultimately the EU just trampled or released, depending again on your perspective, the sovereignty of the individual nation to make those calls.

Matt Cornelius 19:22

Well, uh uh it doesn't always work out, right? If you look at the UK, I mean part of the reason why the UK is not in the EU anymore is that they felt like their sovereignty was being trampled, right?

Jeff Borman 19:32

Right. Well, but yet nonetheless, British Airways is Spanish.

Matt Cornelius 19:36

No, and that so that was a huge issue, right? Because now when the EU separated, they weren't a community carrier. They were uh, and in fact, there was a point where uh there was some question as to whether or not the UK had any national carrier. Because you're exactly right, BA is part of IAG, they're based in Madrid, they're considered a Spanish carrier. Virgin Atlantic, owned 51% by Delta, not a British carrier, right? Phenomenal airline, I might add. I I I've heard that. Uh it's a great brand. Great brand. But um, so uh, and and in fact, so you had airlines, you know, of course, they're always gaming the system as they as any competitive, uh uh rational competitive actor would do. Um, I think it was Ryanair, Ryanair set up subsidiaries that were, you know, Ryanair UK. I think one of their issues was Ireland, right? So um Ryanair is based. I'm gonna forget exactly where they're based, but the bottom line is they were not gonna be able to serve uh certain you know, UK markets when Brexit happened because the UK didn't have any agreements with every anybody. Well, they did, they had their old agreements. So basically, when they exited the EU, it would have flashed back to whatever the last agreements, and those were not open skies. Um so they they they dealt with it, but there was you know two years where a bunch of lawyers were trying to figure out how do we make this work without you know, on day one of Brexit, um, nobody being able to fly between the UK and Europe or anywhere. I mean the US was in the same same boat. Um, and we had to treat, you know, the the British carriers uh specially because they weren't British.

Jeff Borman 21:14

Right. I think and Ryan there is based wherever Michael O'Leary is personally at the moment, I think. I think it's yeah, right, yeah.

Open Skies And Fifth Freedom Flights

Matt Cornelius 21:21

It's Irish. So they set up them and a couple others set up a UK subsidiary and got a UK AOC certificate um and you know ensure that they were able to operate essentially in in in uh in the UK when that happened. But you know, that that was, you know, the again, this framework's all set up, but you know, when you get into the details, it can turn into a disaster and then have really serious uh economic implications.

Matt Brown 21:45

Right. I think it's important to note uh at at this juncture that the the fifth freedom, there was kind of there was kind of a pause after the first five freedoms, right? Like they they hit upon those, and it's like, wow, looks great, guys. Let's adjourn, let's get World War II over with. And then we'll we'll start adding other freedoms later. Why do you think they stopped there? And when did the next round of freedoms start to kind of come into play?

Matt Cornelius 22:08

Uh so I believe it was really driven by again by the freight um and car air cargo. Um so you know, there is still a tremendous amount of national protectionism and commercial aviation. And so um there wasn't a lot of appetite really to go beyond fit uh for passenger service. Um and and again, you know, it wasn't probably until the 90s or so that the uh European uh countries in particular uh started to kind of let go of their national carriers. And so um so there the you know, there isn't like a lot of interest um on the passenger side for any of this other stuff, but on the on the freight side, there's you know basically a huge benefit for everybody involved to be able to get air freight in in a in a in an easy way. And the way air freight basically works is it's kind of unidirectional, right? So FedEx and UPS have their hubs in the Midwest uh of the US, you know, they basically send everything east. Uh they all have hubs in Europe and they'll drop stuff off and pick stuff up, and then they'll go to the Middle East, same thing, keep going, and then you just come back to the US. And so that's where the seventh freedom, and and really sixth freedom is kind of hokey. Uh that's a really hard one uh to kind of I I don't know that there's a lot of sixth freedom around, but seventh freedom for sure, right? Well, wait, let's uh just let's define very quickly the sixth freedom again is it's basically carrying passengers or freight uh between two different countries going through your home country. So it's like United pick selling a ticket from Tokyo to London through Chicago. Like, why would anybody, you know, they don't really sell out, it's not really uh they probably have the rights to do that, but it's you know, Dallas just gonna fly them to London directly, right?

Jeff Borman 23:55

The the sixth kind of the backbone of the Gulf Carrier dominance, right? Where airways can go from Dallas to Doha to Bangkok and you won't give the other examples, but Turkish and Emirates. Yeah, it's kind of the sixth that allows them to leverage their geographic location into transit hub. Right.

Matt Cornelius 24:18

Yeah, that's exactly right. Exactly right.

Jeff Borman 24:20

Singapore, I guess, would be another.

Matt Cornelius 24:22

Yeah. So, and particularly for the Gulf carriers, I mean, their big market really fed all of that was them becoming, you know, the national carry India and Pakistan. You know, because Air India and Pakistan Air have not been, you know, super reliable and have had fits the start, uh, Emirates, Etiad and Qatar basically went in there. I mean, you know, they're moving people to the US, to the South America, then everything through their hubs. Um, so um, yeah, that's that's that's the best example of it. Um, but again, for the US, like kind of western places, we don't really do too much of that.

Jeff Borman 24:56

You know, it wouldn't be an episode without at least one hotel comment. Iceland Air also did something like that. Like also exploited that geographic location between the two continents. Uh what's interesting about Iceland Air from the hotel side is that they built an entire transatlantic connection model through Rykivik uh based on this sixth freedom idea, uh, but also they created a domestic hotel industry owned by Iceland Air. And they leveraged their middle point. Uh, if you ever transit in Rykivik, which is very common, uh, they own all the hotels in the area, and they intentionally make bad layovers so that you stay there.

Matt Brown 25:35

Yeah. I remember 25 years ago, 30 years ago now. Wasn't that part of their marketing pitch? It's like, oh, we're gonna have a three-day, you could always do long layovers in places, but I feel like Iceland Air, they were they were like, hey, this is a feature, not a bug.

Jeff Borman 25:49

Yeah, well, they they sold it well because it was intentional. I mean, they could have gotten you on in two and a half hours to your onward European destination from America, but they just didn't schedule it that way. Bam, now you got to stay in a hotel and then spend a little money in recognition.

Matt Cornelius 26:03

BA tries that and then, but it's uh between the they're a passenger tax and uh you know getting to a hotel from Heathrow, it's not about as easy.

Jeff Borman 26:12

Just yeah, just getting from terminal to terminal in Heathrow is enough of a problem. Yeah, right. They're gonna fix that. Don't worry. Yeah, we're all well, we're on the seventh freedom, and uh this allows for a pure foreign operation between two foreign countries without touching the home country. So uh an Irish airline flying from Paris to Rome uh without touching Ireland. Now, with the EU, I think we talked about that, may not have been the best example any longer. But this is controversial because it gets right into where local airlines really get upset. Yes. Uh and and one of our favorite words on this show, cabotage. Yeah, the introduction of cabotage, or do we have to wait till the eighth?

Matt Cornelius 26:53

No, it is uh I I think it technically no eighth and ninth are are considered cabotage.

Matt Brown 26:59

Sure. And for our for our young listeners, uh, let's define cabotage.

Matt Cornelius 27:03

It's essentially a foreign carrier service in an entirely foreign country, right? So it would be like if British Airways flew from DC to Dallas, but not connected in any way to a London flight. So that's where the rug comes, and that's where you know nationalism and protectionism still comes into play very strongly. Uh they do not want uh you know, United American Delta Southwest do not want to compete with Qatar on a domestic uh that would be that would be way too good for consumers.

unknown 27:34

Yeah.

EU Integration And Brexit Fallout

Matt Cornelius 27:35

Yeah. Well, you know, and there is a national security component. So when when this gets discussed, so uh, you know, part of all of this too, not the freedoms, but um, if you look at air transports, they have a number of articles and they tend to be standard articles, but you know, one of the most controversial articles is always ownership and control. And so the US has a national law that I think uh uh prohibits foreign ownership of an air carrier above 25%. Uh in Canada, I think it's 49%. It it varies by country, but but essentially, you know, nearly all countries do not want uh foreign companies owning an asset like an airlines. One of the things that we do here in a lot of places, uh, we have a program called CRAF, which is the civil reserve air fleet. Uh and basically one of the deals the US government has with the US, any US certificated carrier, is in the event of a emergency or war or whatever, or um, you know, whatever serious situation, the US government can commandeer aircraft and crews to use as they see fed. It's not used very often, but it was used uh when we evacuated uh Afghanistan, they activated the craft program and basically said, you know, United American Delta, you know, you need to fly these flights. And uh, you know, they pay for them and everything, but bottom line is um, you know, the airlines have to do it. And so uh, you know, whenever this comes up, uh besides the competitive elements of it, the thing that usually stops it dead in its tracks is everyone says, well, this is a national security issue. We can't have we can't rely on France to uh turn over their airplanes and crew to help us in a in a wartime national emergency. Um so you know that is what it is. But um, you know, that's why I you know I think you'll never see cabotage uh in the US. Um now some countries, you know, need that. They don't have a choice, right? Based geographically or whatever. Europe basically is, you know, again, that European community of of uh aviation operators. They they're in it together, at least for now, right? So um so they're allowing it. And they don't, you know, perhaps re rely on their their air fleets for national security.

Matt Brown 29:55

But Matt, is there any scenario over the next 10 years, say, where something like that could happen in the United States? For instance, that we grant for through some kind of special permission, Laftanza can fly JFK to LA.

Matt Cornelius 30:12

There is, I don't think they sell. So, like for a while, AirTNU uh was flying Papete, but that would that would be a six freedom flight from Papete Los Angeles to Paris. And they can sell the Los Angeles to Paris, but that's that's not the same. Uh no, I don't think so. I mean, uh the bottom line is um, you know, our carriers will never allow that politically. Um I I think uh you know, the national security element will always be an easy fallback for politicians. You'd have to change the law, basically. Um so yeah, don't expect anytime soon.

Jeff Borman 30:46

It would the ninth freedom, ending cabotage in the US. This would be the political earthquake, right? Labor unions would storm the Capitol. Uh the U.S. airline oligopoly would break up. Loyalty programs lose their power. Every contract would be up for a global bidding war. All bets are off. Yeah. All bets are off. And you know, the the certainty that would come from that, I think, is uh the consumer would win. We would have uh quality airlines in the United States like you have out of the Gulf. We would have uh competition for prices beyond just three and a half carriers in the U.S. I mean, these things would all help the U.S. consumer. Uh, and for those of you who could not see Matt Cornelius while Matt Brown was asking the question, he was shaking his head for the entire entirety of the question.

Matt Brown 31:32

Well, I do want to I do want to throw out one scenario. I think there could be a financial component here, let's say a fee that um the federal government would put out there and say, all right, British Airways, you want to fly between these two cities and have your crew stationed in either one of those two, and that's it. You will now pay a fee to the government to do that. And I think in our current tariff crazy environment, that doesn't feel so out of place.

Matt Cornelius 32:02

Yeah. So, well, that's again, if you uh dive into the Chicago Convention, that that's one of the basic tenants, too, is uh non-discriminatory fees and charges, right? So and it and it's one of the things that kind of I think was an issue with the Russian overflight situation because uh Aeroflat was not paying uh to fly, you know, um over Russia, but British Airways was. Um and that's that's a no-go. Um and in fact, you know, in in our uh regulations, domestic regulations, uh aviation fees have to be non-discriminatory. So you you can't uh pick different fees for different I mean they could change that, but but that would be a pretty big impediment uh to to to doing that. But again, you I think you're the sentiment is right, right? Um if if the there are dollar signs uh in doing some of this, that maybe they find a way and or do it and you know worry about the lawsuits later.

Jeff Borman 32:58

Matt, is code share the way you get around this?

Matt Cornelius 33:01

Yeah, yeah. So that's that's where again, you know, at the birth of open skies came uh joint ventures, antitrust immunities, and I didn't say earlier code shares. Um so uh that's absolutely right. You know, in fact, we've tons it probably does have uh can sell right uh a New York to Los Angeles flight and you know to a German citizen um and United's could operate. Um so and code sharing in in the air uh transport agreements that uh these traffic rates, these freedoms are buried in, also have rates about co-chairing of Canada.

Jeff Borman 33:36

Do hot air balloons qualify? And I mean this actually in a weird, serious way because wasn't in the last five years there was a I believe it was a Chinese balloon and an air US airspace uh at a very high altitude, it caused some stir about national security. Does that have anything to do with this conversation?

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Matt Cornelius 33:56

Not um well, only in the fact that again, like kind of cornerstone of the Chicago Convention, uh, and again, it it depends on whether or not it's a state aircraft, so you know that in a second, but but bottom line is um the the the each country has uh sovereign rights over its airspace, all the way up to I don't know where airspace ends, but it's space. It's a hundred and something thousand feet. So um so yeah. So the balloon, uh if it's a you know commercial, private, non-state balloon, um absolutely disapplies. Uh and you know, if it is a state uh aircraft, I think that has a different I'm that has a different world of legal consequences if it's more on the military uh side of the house. Um so uh bottom line is yeah, they they can't do that.

Jeff Borman 34:44

I looked it up while you were saying I saw 328,000 feet above sea level or 62 miles. So at the 63rd mile, you can fly your own balloon, folks. That's what you've learned.

Matt Cornelius 34:54

Well, you know, it's a piece because you know, now I mean the space travel is coming, right? Commercial space. They just created a commercial space office cent, the FAA, um, to deal with this. And yeah, I mean, there's gonna have to be uh, and maybe there already is some sort of Chicago convention for space to decide how that the nine freedoms of atmosphere.

Jeff Borman 35:16

Uh what should we title this? We should actually think about this. I don't know if nine freedoms is right. I mean, the more we talk about this, uh I'm starting to think that like some other titles like the nine bureaucratic airlocks or uh sky looked open, it's actually fenced, you know, something like that. These are these are the nine restrictions of consumer and cargo air, uh, very nicely packaged, but it's cool to understand them. We live them every day, and I guess that's really what we you and I talk about here, Matt, is that this conversation is always about understanding the travel world uh that we're bound by. Uh, but it's kind of an invisible hand that we just live through if we don't ask smart people the right questions.

Matt Brown 35:57

There you have it, America. The nine freedoms of the air. Enjoy them at your leisure or peril, depending on your point of view. Um Matt, thank you so much.

Matt Cornelius 36:08

Yeah, thank you, gentlemen.