'Open skies' talks to begin this autumn

  • 2003-07-03
  • Jean-Louis Doublet

The United States and the European Union agreed on June 25 to start landmark talks this year on liberalizing the trans-Atlantic air market.
The open-skies talks, which have been held up for several years, could radically change relations between European and American airlines
President George W. Bush said after talks with EU leaders that the talks were part of "a vital trade relationship."
The United States has bilateral accords with 11 EU nations, but these are limited in scope, and the European Commission does not like them. But the bloc only gave the commission permission to negotiate a global accord with the U.S. government this month.
An open-skies accord could throw up new alliances and routes.
At the moment European airlines can only fly between their own country and the United States and cannot fly between U.S. cities.
American carriers face the same restrictions though they have a little more leeway because of the bilateral accords that the U.S. authorities have made in Europe.
Major airlines have tried to get around the aviation accords through code sharing — under which passengers can make journeys with a single ticket on carriers in a commercial alliance.
U.S. legislation throws up a legislative barrier to liberalization by banning any foreign company from holding more than 25 percent of an American carrier.
The subjects to be discussed and the regulatory framework of the open-skies talks were not set out in the June 25 announcement. But any accord would face resistance from EU member states, the U.S. Congress and from some airlines.
European officials have said that ownership of airlines is likely to be one of the early topics.
European airlines are a lot smaller than their U.S. counterparts.
Germany's Lufthansa carries about 40 million passengers a year, while American Airlines has about 110 million passengers.
But U.S. airlines are facing major financial difficulties. Bankrupt United Airlines has Chapter 11 protection in the United States from its creditors.
U.S. Airways recently came out of Chapter 11.
The White House said in a statement that a comprehensive deal would provide "consumers, shippers, and national economies the enormous benefits of a market-based approach to international civil aviation."
"We look forward to extending the benefits of liberalization to the trans-Atlantic market and building on the foundation established by the open-skies agreements we have already concluded with 11 EU member states," the White House said.