Nippon Cargo Airlines, the new all-cargo Japanese airline whose entry into the U.S. market is being hotly contested by Los Angeles-based Flying Tiger Line, has been given interim permission to begin flights to the United States while awaiting approval of an official operating license, Nippon Cargo officials said Tuesday.
Yoshiyuki Shibuya, vice president of the company’s North American operation, said the airline plans six round-trip flights a week between the United States and Japan. Nippon Cargo will inaugurate service next Wednesday with a flight from Tokyo to San Francisco and New York’s John F. Kennedy International Airport.
Nippon Cargo’s services “will be of significant benefit to U.S. companies that trade with Japan and to U.S. consumers,” Shibuya said in a statement.
The interim arrangements were worked out Tuesday by U.S. and Japanese negotiators meeting in Japan to work out changes to the longstanding bilateral aviation agreement between the two nations. A number of amendments to the agreement are expected to be announced by the State Department as early as today.
Nippon Cargo has been granted an exemption from the provisions of federal aviation law that govern the operating authority of foreign airlines in the United States, according to sources close to the negotiations.
An official of the Transportation Department, which administers aviation law, confirmed that “a tentative understanding on the issues has been reached” concerning Nippon Cargo.
The official, who spoke on condition that he not be identified, said an exemption would be included in final language of the overall agreement now being worked out. Asked whether he expected a longer-term operating permit to be issued, the official said: “Absolutely. I’ve hardly ever seen an exemption that was taken away once it was granted.”
Nippon Cargo’s application to initiate U.S. service, filed in February, 1984, is strongly opposed by Flying Tiger, the largest American air-cargo carrier between the United States and Japan.
Flying Tiger officials contend that, because Nippon Cargo is owned primarily by major Japanese shippers and freight forwarders, it also will receive increasing air shipments at the expense of Flying Tiger and other U.S. carriers.
Flying Tiger holds a 27% share of the transpacific air-cargo market, while other U.S. carriers account for 13%.
At President Reagan’s direction, outgoing U.S. Trade Representative William E. Brock asked the International Trade Commission last December to examine trade implications in the U.S.-Japan air cargo market.
In a statement, Flying Tiger noted that the interim permission granted Nippon Cargo is subject to revision by both countries after the ITC releases its findings, probably by June 12.
The carrier noted the agreement fails to “resolve the longstanding trade barriers that inhibit U.S. carriers’ ability to do business in Japan on a fair and equal basis.”