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US all-cargo carriers force Saudia retreat on flying privileges

Saudi Arabian airline to consult with government about providing mutual access

Saudi Arabian flag carrier Saudia has asked the U.S. Department of Transportation to ignore its request for new cargo traffic rights while it consults with the government about granting similar market access to U.S. all-cargo carriers, a key sticking point for securing approval.

Atlas Air (NASDAQ: AAWW), Air Transport Services Group, FedEx Express (NYSE: FDX) and UPS (NYSE: UPS) last week strongly objected to Saudi Arabian Airlines’ exemption request to operate freighter aircraft between Belgium, Chicago and New York without having to touch down in its home country first because the air transport services agreement between the countries doesn’t allow for such flexibility and Saudi Arabia has refused to grant reciprocal treatment for U.S. carriers.

In response, Saudia on Tuesday appealed to U.S. regulators to hold a decision on its application for so-called seventh freedom rights while it checks with Saudi Arabia’s government “about the possibility of granting reciprocal seventh-freedom rights to U.S. all-cargo carriers.”

The letter said it will provide an update to the DOT within 90 days. 

Freedoms of the air are international commercial aviation agreements that grant a country’s airlines the privilege to enter and land in another country’s airspace. There are nine commonly accepted freedoms of the air. Most nations exchange rights for overflight and technical stops to refuel through an international convention and then establish further freedoms, such as direct revenue service for passengers and cargo, in bilateral or multilateral air service agreements. Seventh freedoms enable carriers to operate from a foreign hub without having to connect to the home country.

The U.S. all-cargo airlines also questioned whether Saudia’s request is in the public interest, noting that other carriers with various flying rights could meet cargo owners’ shipping needs on the trans-Atlantic route. Saudia said in its application that supply chain bottlenecks have made it difficult for shippers to move goods by sea and that customers are looking to it for alternative sources of capacity in a tight market.

“Saudia vaguely references, without substantive supporting facts or evidence, the well-known strain the COVID-19 pandemic has placed on the global supply chain as a rationale for the Department to grant its Application. Through, however, a series of Open Skies and other air services agreements championed by the U.S. government and others, including a combination of 3rd , 4th, 5th and 7th freedom air cargo rights, multiple U.S. all-cargo carriers may serve the markets and routes at issue in this docket and provide needed capacity in response to market conditions and demands,” ABX Air and Air Transport International, the cargo airline subsidiaries of ATSG (NASDAQ: ATSG), said in their filing.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com