U.S., Australia No Closer in Airline Dispute

Transportation Secretary Federico Pena and Australian Minister of Trade Peter Cook reported no agreement Thursday in a trade dispute between Northwest Airlines and the Australian government.

Officials from both countries will continue talks, however, they said.

Northwest is seeking the reversal of an Australian requirement that it limit the number of passengers it picks up in Japan on three weekly flights linking New York, Osaka and Sydney. Australia says Northwest is trying to back out of an accord it signed two years ago agreeing to the limits.

“We obviously had a very productive meeting. We will confer again to see what we can do about resolving the issue,” Cook told reporters after talking with Pena for about two hours.

“Over the next several weeks or so, these conversations will continue and hopefully we will reach an accommodation,” Pena said.

Northwest has asked the Australian Federal Court to overturn a demand that no more than 50% of the passengers on each flight board in Osaka. That means at least 50% must board in the United States.

Australia last month announced it will cancel the three flights June 30 because of the dispute, but it invited the airline to reapply for reinstatement of two of the flights.

In retaliation, the U.S. government canceled three of Australian-owned Qantas Airways’ 10 weekly nonstop flights between Los Angeles and Australia by the end of the month.

Qantas recently announced that it would add three flights between San Francisco and Sydney, but Transportation Department officials said it is unlikely the U.S. government would approve such a move.

Northwest and Australian officials have begun arbitration proceedings.

Northwest claims the 50% rule violates a U.S.-Australian aviation treaty. But Australia contends that Northwest agreed in writing to the condition before it started the route in October, 1991.

Northwest signed the agreement, but only after Australian officials said it would not be enforced, Northwest spokesman Doug Killian said.