EU Negotiator Upbeat For Next Week's Open Skies Talks

Fresh talks between the European Union and the United States on a second phase of the Open Skies agreement get underway in Brussels next week, with lead EU negotiator Daniel Calleja telling EuroBTN he is optimistic that the U.S. government can be persuaded to sign—though not immediately.

Phase One, which went into effect in March 2008, handed U.S. carriers their main wish of gaining unlimited access to London Heathrow airport. This was achieved through allowing EU and U.S. carriers to fly from any point in the United States to any point in the European Union. Phase Two is scheduled for introduction by November 2010 but has yet to be agreed upon, and the European Union wants to achieve its two principal aims of loosening restrictions on foreign ownership of airlines and allowing onward services within the United States.

Next week's talks, set to take place on June 25 and 26, will be the first since Barack Obama took office as president of the United States, and the new administration has not yet made clear its views on Phase Two. The situation is clouded further by the United States not yet naming many of the officials on its negotiating team.

The ownership issue in particular has run into stiff opposition on Capitol Hill, and unions also have objected because they fear jobs could be lost if U.S. airlines are acquired by European carriers with stronger balance sheets. With Democrats traditionally having stronger ties to unions than their Republican rivals, European airlines fear the Obama administration could take a hostile, protectionist stance, especially during the current economic crisis.

Calleja, the European Commission's director for air transport, told EuroBTN he will work hard with unions and other labor stakeholders to persuade them that Open Skies is in their interest, not against it. Next Monday and Tuesday, before the negotiations start, will be devoted to face-to-face consultations with these stakeholders on the ownership question.

"It is true that labor has expressed concerns on both sides of the Atlantic," said Calleja, "but we believe that removing ownership restrictions would lead to greater success in creating jobs. We don't think this should be a concern. On the contrary, it is a real opportunity."

There is considerable pressure on Calleja to deliver, because U.K. carriers are likely to lobby hard for the abandonment of Phase One of Open Skies if an agreement cannot be reached. "I am not worried. As a negotiator, I am always very positive," said Calleja, who is tasked to provide a progress report by the end of this year.

Next Wednesday will be dedicated to a review of progress of Phase One. It led to four U.S. carriers and Air France launching services from Heathrow to the United States for the first time, although some of these flights have subsequently been axed owing to the recession. Nevertheless, Calleja regards Phase One as a success, adding that it has led to an increase in transatlantic flights from Ireland and Spain, while British Airways has launched services to New York from Paris and Amsterdam through its new all-business-class subsidiary OpenSkies. Furthermore, he said, non-EU members Norway and Iceland have both applied to join Open Skies.

A BA spokeswoman said her airline has not suffered from increased competition at Heathrow. However, as a result of that competition, the U.K. flag carrier is hoping this will clinch antitrust immunity for its proposed partnership with fellow Oneworld airlines American Airlines and Iberia.

"With five new airlines operating transatlantic flights from Heathrow, we believe the competitive landscape at the airport has changed dramatically since 2001," she said.