EU and US enter "open skies" deal

22nd March 2007, Comments 0 comments

22 March 2007, Brussels (dpa) - The European Union on Thursday entered a deal with the United States that will boost competition and the number of passengers flying across the Atlantic, but said the accord was only a first step to pry open the US air travel market. Under the so-called "open skies" agreement - the first of its kind - EU air carriers will be allowed to fly from any airport in the 27- member EU bloc to any airport in the US and vice versa. The accord will replace bilateral pacts between the U

22 March 2007

Brussels (dpa) - The European Union on Thursday entered a deal with the United States that will boost competition and the number of passengers flying across the Atlantic, but said the accord was only a first step to pry open the US air travel market.

Under the so-called "open skies" agreement - the first of its kind - EU air carriers will be allowed to fly from any airport in the 27- member EU bloc to any airport in the US and vice versa.

The accord will replace bilateral pacts between the US and EU countries, ruled as illegal by the EU's highest court.

German Transport Minister Wolfgang Tiefensee, whose country currently holds the rotating EU presidency, hailed the unanimous agreement as a "breakthrough" for trans-Atlantic aviation ties.

However, he acknowledged that the deal was only second-best for the EU, as it did not fully open the trans-Atlantic air travel market.

EU ministers said they were poised to immediately start negotiations on a second deal with the US in a bid to gain more access to the closed US market.

While US carriers are allowed to fly between countries in Europe and to control as much as 49 per cent of European airlines, EU carriers still cannot offer services between US cities, and face a 25 per cent limit on voting rights in US airlines.

The Association of European Airlines (AEA) welcomed the agreement as "good news for passengers."

However, the AEA called for a more far-reaching deal, arguing that the current pact did not yet ensure fair competition between EU and US airlines.

Echoing this view, the International Air Carrier Association said that the agreement amounted to a "failure to reach a balanced result for airlines on both sides of the Atlantic."

EU Transport Commissioner Jacques Barrot said the agreement had "great political and economic importance." He said the deal would generate more than 25 million additional passengers over the next five years - a 50 per cent increase on current numbers.

The accord allows EU member states to terminate the deal and restrict US airlines' new rights if no follow-up agreement with the EU is reached in 2010. Barrot said this should raise the pressure on the US to conclude the second stage of talks.

"We remain committed to full liberalization," Barrot stressed.

The EU and the US have long struggled to make progress in the open skies talks, which stalled when Washington withdrew a plan to give European airlines more freedom to invest in US airlines and to participate in management decisions.

The EU had made the investor rule a condition for putting in place the open skies agreement.

The European Commission has argued that the expected increase in trans-Atlantic flights would lead to 12 billion euros (15.8 billion dollars) in economic benefits and the creation of up to 80,000 jobs on both sides of the Atlantic.

EU ministers decided to delay applying the accord by five months until March 2008 in a concession to Britain which makes up for 38 per cent of trans-Atlantic air travel.

Britain was the only EU member opposing the deal as it would open London's busy Heathrow airport to full competition.

Tiefensee said that ministers were also mulling over several measures to reconcile the planned boost for trans-Atlantic air travel with environmental concerns.

These would include bringing aviation into the EU's trading scheme for greenhouse gas emissions and introducing emissions-related fees. Another option would be to improve aircraft technology in order to reduce congestion over EU airports.

EU leaders earlier this month vowed bold action to fight climate change and agreed to slash greenhouse gas emissions by 25 per cent in 2020.

Air travel in Europe and the US accounts for 60 per cent of global air traffic.

DPA

Subject: German news

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