New agreement forms basis for US-European air rules revolution
- Friday, 09 February 2007
THE FIRST stage of a new US-EU agreement, which will establish an ‘Open Skies Plus’ framework between the United States and all 27 EU member states is expected to be signed on April 30.
If approved at a US-EU summit in Washington DC, the agreement will allow rights to be applied on October 28 this year — the start of the International Air Transport Association’s winter traffic season.
The US and EU have agreed to begin second stage negotiations on possible further liberalisation within 60 days of the agreement’s application.
When fully approved, the agreement will have significant economic benefits for America and Europe.
It will replace existing bilateral agreements between the US and EU member states and will authorise every US and EU airline to:
• Fly between every city in the EU and every city in the US.
• Operate without restriction on number of flights, aircraft and routes.
• Enter into co-operative arrangements, including code-sharing, franchising and leasing.
In addition, the agreement fosters enhanced regulatory co-operation in regard to competition law, government subsidies, the environment, consumer protection and security. It establishes a consultative joint committee through which the US and the EU can resolve questions and further develop areas of co-operation.
The Open Skies Plus framework of the agreement would:
• Allow US investors to put money into an EU airline, as long as the carrier is majority owned and effectively controlled by a member state and/or nationals of member states.
• Make clear that — under US law — EU investors may hold up to 49.9 per cent of the total equity in US airlines — and, on a case-by-case basis, even more.
• Open the possibility for EU investors to own or control airlines from Switzerland, Liechtenstein, members of the European Common Aviation Area (ECAA), Kenya and America’s Open Skies partners in Africa, without putting at risk such airlines’ rights to operate to the United States.
• Grant new traffic rights to EU carriers that would open the door to cross-border airline mergers and acquisitions within the EU, which is possible today only if carriers are prepared to place their international operating rights in legal jeopardy.
The agreement provides for a pro-growth, pro-competitive framework that would:
• Eliminate outmoded restrictive arrangements that affect London Heathrow airport, where US-British service is now limited to only four airlines.
• Allow EU airline transport of non-DOD USG passengers (employees and civilian-agency-funded contractors) and cargo on scheduled and charter flights between two foreign points and on all US-EU routes not covered by a GSA ‘city pair’ contract.
• Allow EU airline transport of cargo between the US and all third (non-EU) countries — and transport of passengers between the US and members of the ECAA from the date of signature of the agreement.
