EU-US Agree on Tentative Open Skies Deal

By | March 3, 2007

The European Union and the United States agreed yesterday on the outline for an Open Skies treaty. The provisional agreement will be presented to the EU transport ministers on March 22nd. The first-stage deal, if approved, would go into effect October 28th.

The pact would allow European Airlines to fly from any EU city to any American city, regardless of their home country. It would also loosen restrictions on US carriers…removing the biggest obstacle at the moment, tight restrictions on flights into London Heathrow airport. It also provides for the possibility of allowing EU carriers fifth freedom rights…the right to fly onward to other nations after a stop in the U.S.

The biggest issue for the EU, foreign ownership, has been settled, at least for now. The new pact will allow EU companies to buy up to 100 percent of non-voting shares, although the shares with voting rights will remain limited to 25 percent.

The United Kingdom is being urged to block the deal by their two leading long-haul carriers, British Airways and Virgin Atlantic. The UK accounts for 40 percent of the entire EU-US market, thanks to Heathrow Airport position as the world’s biggest international airport and a gateway for passengers from the US into Europe and Asia.

UK Sources believe the draft does not address access to the US domestic market for EU carriers and EU investment in US airlines while giving any American carrier the right to fly into Heathrow and beyond into the EU. They believe the US concessions are miniscule. BMI, who has been trying to launch US service from Heathrow for seven years, is pleased with the development.

The EU overall, in a press release, seemed enthusiastic about things. As did the Association of European Airlines.

Author: Guru

Guru is the Editor of Flight Wisdom and a long time aviation enthusiast.