U.S., EU Seeking To Step Up Open Skies Talks

The United States and European Union are accelerating second-stage Open Skies negotiations in the hopes of finalizing an agreement in the first half of the year, though a number of key issues including foreign ownership remains in dispute, the chief U.S. negotiator told BTN last month.

U.S. State Department deputy assistant secretary for transportation affairs John Byerly said negotiators from both sides of the Atlantic planned to meet this month for their sixth round of negotiations in the second stage of the Open Skies agreement enacted in 2008, likely followed by another round of talks in February.

"We're hastening the pace of negotiations," Byerly said. "We've declared, including President Obama and his EU counterparts at the most recent EU-U.S. summit, the wish and hope that we will complete the second-stage negotiations and have an agreement in 2010."

Byerly said the two sides have made progress on a number of issues, including safety, air traffic control, security and the environment, but sticking points remain, including the issue of foreign ownership. The first-stage agreement, enacted in 2008, maintained limits on foreign control of U.S airlines.

"We haven't said we will not do it ever," Byerly said. "We said we have an open mind to discussing it, but we've also laid out some of the challenges and concerns, such as national defense, the role our carriers play in the so-called Civil Reserve Air Fleet program and, also very much an important factor, the concerns that airline labor has expressed that loosening the rules and allowing foreign ownership and control, even if it's just control of a European carrier, could strengthen the hand of management over labor. These are issues we've discussed, but we haven't identified solutions that both sides are ready to endorse yet."

While EU negotiators hope the United States will budge on ownership, Byerly said the United States is seeking changes to rules that govern night flights in Europe. "For us, the most important of a finite set of objectives and the most difficult, is our concern about how Europe has implemented the balanced approach to noise management, and in particular the problem of a creeping increase in the number of European airports with either total night flight bans or very restrictive night flight conditions," Byerly said. "Those are a matter of enormous importance to our cargo industry."

While provisions on foreign ownership and noise management will be negotiated, Byerly said the United States is less inclined to budge on cabotage, or the right of foreign carriers to operate internal U.S. service. "I think we've stated often and quite clearly that there is no prospect of amending our laws to allow cabotage," Byerly said. "It is in our view not an especially important right in the real world of modern aviation. For us, it's not really even on the table. It's not something where there's even the possibility of us moving one millimeter."

Though EU negotiators have the option to pull the thread that would unravel the entire first-stage agreement, many in the industry pointed to that outcome as unlikely, and Byerly said he hopes negotiators will move beyond that possibility. "We think on the U.S. side that that is not a helpful quasi-threat in the text of the agreement. It only serves to destabilize and raise concerns, and the last thing the commercial aviation and airline business needs right now are destabilizing factors and additional worries. For the United States, in many ways ensuring the stability of the first-stage agreement is something that is an absolute top requirement for us. For that reason, we're pursuing the second-stage negotiations to move beyond this implicit threat in the first stage."

Byerly said there is "no hard date" for finalizing this stage of negotiations, though he suggested the first half of the year as a target to coincide with the conclusion of the Spanish presidency of the EU Council of Ministers. "They've indicated a strong interest in aviation and making the improvement of economic relations with the U.S. as a priority of their presidency. If at all possible, we'd be interested in doing something during the Spanish presidency, before the end of June of 2010."