The European Union and the United States yesterday agreed to open "substantive negotiations" in late September in Washington on a new liberalized aviation treaty that would replace existing bilateral agreements between the United States and individual European nations. A redefined framework between the world's two largest aviation markets could encourage further alliance and consolidation activity, spur foreign investment and free carriers to fly to many more airports within a transatlantic "open aviation area."
The announcement, made during an E.U.-U.S. summit meeting in Washington, followed an early June mandate from the E.U. Council that European Commission aviation regulators as a single negotiating bloc engage the United States and other non-E.U. countries.
"Today, we are launching negotiations on a comprehensive air services agreement, better known as Open Skies, that will benefit our consumers, our airlines and our communities," said U.S. President George W. Bush during yesterday's summit.
"This will change the industry of aviation transport and will provide better service, lower prices and more choice for the 11 million people who cross the Atlantic every year, and even more in the future," added E.U. President Romano Prodi.
Specifically, the E.U. is after resolutions to "legal problems" in existing bilateral agreements between the United States and several of the 15 individual E.U. nations, raised last November by the European Court of Justice
(BTN, Nov. 5, 2002) and to establish an open market free of foreign ownership restrictions on "each other's airlines." The Bush Administration currently is mulling a higher cap--49 percent from 25 percent--on foreign investment in U.S. carriers.
The E.U. said an open aviation area covering both sides of the Atlantic would promote competition to the benefit of travelers, allow carriers to choose the airports they serve--free from longstanding protectionist policies that favor national flag carriers in their home European markets and domestic carriers in the United States--and ease regulations on industry consolidation.
A key item on the U.S. priority list is expanded access to London Heathrow Airport, which under the existing Bermuda II agreement negotiated a generation ago permits only two U.S. carriers to use the airport for transatlantic flights. American Airlines and United Airlines currently hold that status, much to the dismay of other U.S. majors that repeatedly have requested similar access.