PRESS RELEASE

U.S.-Japanese Governments Reach Agreement on Air Transportation Liberalization Package

September 14, 2007

U.S. and Japanese negotiators reached an agreement in Tokyo early today on a package of significant liberalization measures in our air transportation relations. These new rights will allow U.S. cargo carriers to commence new service between the United States and the Japanese cities of Osaka and Nagoya. The new agreement lifts restrictions on airline pricing and significantly expands codesharing opportunities for passenger and cargo airlines. It allows UPS to operate into Chubu for "six weekly frequencies," with two points beyond Japan. The agreement also allows Polar Air Cargo to operate into either Kansai or Chubu airports for "six weekly frequencies" with two points beyond Japan. The annual limit for the number of overall Japan-U.S. charter flights was eliminated. There will continue to be limits on the number of charter flights to/from Tokyo airports, but the limit for the number of charter flights to/from Tokyo airports will be expanded from 300 to 400 in 2008, and 500 in 2009.

The State Department led the U.S. delegation, which included representatives from the Departments of Transportation, Commerce, and Interior, as well as from the U.S. airline and airport industry, and the local governments of Guam and the Commonwealth of the Northern Mariana Islands. The two sides agreed to resume the talks by the summer of 2008.