European Union transportation officials today unanimously approved the Open Skies agreement forged earlier this month between the United States and EU, setting the course to liberalize transatlantic air travel. The agreement, set to go into effect in March 2008, gives carriers greater access to foreign money and markets, and promises to increase competition.
The endorsement of the agreement immediately set several airlines on the path toward offering new services. Continental, for example, wasted little time in announcing plans to inaugurate flights between Houston and Heathrow before summer 2008, subject to approval. Under the new agreement, Heathrow no longer provides protections for carriers that currently operate from that airport to the United States. Aer Lingus, meanwhile, said it plans this year to launch new long-haul service to San Francisco, Orlando and Washington Dulles in light of the new agreement. More carriers are likely to embark on similar expansion plans afforded by the agreement.
"This Open Skies agreement paves the way for much-desired increased service between the United States and Europe," Air Transportation Association president James May today said in a statement. "It has the potential to provide enormous benefits to our respective customers and economies."
Although this is the most progress yet made in pursuit of a U.S.-EU Open Skies treaty, the agreement only resolves some of the issues between the parties. The second stage must begin within 60 days of enactment, and EU transport officials could suspend the deal if the U.S. declines further concessions.
The first stage agreement could allow foreign ownership stakes in U.S. airlines to exceed 50 percent, while European countries would have "the right to limit U.S. investments in EU airlines reciprocally to 25 percent voting equity."
Through this agreement, European airlines now can operate flights to the U.S from any EU country, as opposed to just from their home country. The agreement also removes "all restrictions on pricing on all routes between the EU and U.S., but with a derogation to maintain the prohibition on price leadership by U.S. airlines on intra-EU." The deal provides unlimited codesharing "between EU, U.S. and third-country airlines," while also setting forth allowances to harmonize air security policies and safety procedures, among others.
U.S. Transportation Secretary Mary Peters today said the agreement "will bring new and valuable benefits to air travelers and communities on both sides of the Atlantic" and "foster more affordable and convenient air travel." Meanwhile, European Commission vice president Jacques Barrot, "This confidence and unity means that the European side enters the next phase of negotiations with the United States in a strong position. This first phase of our transatlantic agreement is not a dead-end. I am confident that the process we have started today will continue onwards to deliver greater freedom for investors in aviation, even closer cooperation between the two sides and a healthier air transport industry in general, not just across the Atlantic, but in due course with other countries all over the world."