They get the cream of the service between our two countries under agreements that control what routes can be flown, the flight frequency and the flight capacity. It is anti-consumer because it limits seat availability and permits higher fares.
The result: There is twice as much air travel between the U.S. and Great Britain as between the U.S. and Japan, even though Japan has more than twice as many people as Britain, significantly higher per capita income and the Japanese love to travel.
In the unequal deal, United and Northwest are the only U.S. airlines that can board passengers in Japan for travel on to Asia. Only JAL has comparable "beyond rights" in the U.S. and they aren't much.
Third-country airlines are completely frozen out of U.S.-Japan service.
It's clearly a situation that needs fixing in the interest of consumers on both sides of the Pacific at a time when Asian travel has much higher growth rates than European travel.
But Sumner La Croix, a University of Hawaii economist who outlined it at a recent East-West Center breakfast forum at Bank of Hawaii, has a hunch the changes are likely to be more incremental than sweeping.
La Croix noted: Although quotas are discouraged in almost all other industries by the 1994 World Trade Organization agreement, the agreement does not cover air passenger service. Global aviation instead is covered by approximately 3,000 two-nation agreements.
Two pertinent terms in relation to these are Open Skies and Fifth Freedom.
Open Skies gives each country unlimited access to the other's airports but still leaves third countries out of the deal. Last February the U.S. concluded an Open Skies pact with Germany. Smaller European Union countries have followed but the other large EU nations are holdouts.
Japan says it will not even consider Open Skies in the present U.S. negotiations. Too bad, since it could mean a lot more point-to-point service to Hawaii from Japan.
Fifth Freedom or "beyond rights" are the right to pick up passengers from the second country to fly on to a third. United and Northwest enjoy them to connect from Tokyo to Seoul, Manila, Hong Kong, Bangkok, Singapore, Beijing and Shanghai. No other U.S. airlines have them.
The only Fifth Freedom rights for Japan in the U.S. permit JAL's present Los Angeles-Sao Paulo route and allow JAL to fly on to Europe only after a San Francisco stop. JAL tried San Francisco-New York-Europe in the 1980s but stopped service after financial losses.
Japan wants to freeze or cut back the Fifth Freedom rights for the U.S. from Japan, an anti-consumer move the U.S. should strongly resist, in La Croix's view.
He favors forestalling this with two unilateral actions by the U.S. that would impose few costs on U.S. airlines:
Eliminate the burdensome San Francisco requirement on JAL's Fifth Freedom rights from the U.S. to Europe.
Allow all Japanese airlines to operate Fifth Freedom flights from any U.S. international airport to any third country in Europe, Central America or South America.
If the U.S.-Japan service remains too restricted, other U.S. lines like Delta and American may bypass Japan in favor of giant new international terminals being built near Seoul and Hong Kong.