‘Open skies’ talks hailed as a success
Talks aimed at deepening transatlantic airline market, but no resolution on ownership rights.
Talks aimed at deepening competition in the transatlantic market ended today (25 March) with negotiators for the European Union having failed to secure guarantees that European airlines can buy majority stakes in their US rivals.
The close of the second round of talks on ‘open skies’ was hailed as a success by both sides, but there has been no resolution of the question of ownership rights – a crucial issue for many European governments.
The outcome of the negotiations will be put to the EU’s transport ministers at their meeting in June. In theory, the current arrangements on ‘open skies’ could be suspended in November if either side is unhappy.
Earlier this month the transport ministersof the EU’s member states had told the European Commission that US investment restrictions must be lifted. Currently, US airlines can own up to 49% of a European airline, while European companies are limited to a 25% stake in their US rivals.
In the course of three days of talks this week in Brussels, the EU once again called for changes in US law on company ownership. The two sides agreed to continue discussions.
The Commission said it had gained “a commitment to engage in a process towards reform”, describing the outcome as “a major step forwards”. But the deal does not specify a timetable on changing US law. Nor are there guarantees that US legislators will support the EU’s ambition.
“There is no agreement on any sort of change in our law. We have not agreed to that. Our Congress has not agreed to that and I think in the near term it is unlikely it would,” the lead US negotiator, John Byerly, told reporters after the talks. “Europe is clearly not giving up on this issue. We have agreed that this is a matter that we will continue to discuss.”
For its part, the US is seeking changes in EU noise regulations, which the Commission cannot guarantee.
Daniel Calleja Crespo, director for air transport at the Commission, said: “We cannot bind our legislators; it has to be negotiated…It would be strange that we would start putting deadlines to our negotiators.”
But European airlines will gain new rights to fly from the US to non-EU countries under the terms of the agreement.
The two sides agreed to co-operate on the environment, by ensuring that market-based measures to cut emissions, such as trading schemes, are compatible. They also promised to work together on green technology, biofuels and air-traffic management.
The first ‘open skies’ agreement, which lifted restrictions on the right to operate transatlantic flights, came into force in 2008, allowing a German carrier such as Lufthansa to fly to the US from outside its home state. But European airlines remain unhappy that they did not get equal rights to buy US companies.
Having not seen the fine print of the deal, airline representatives remained cautious. David Henderson at the Association of European Airlines said: “Any change in the law is seen as a long-term objective. We are not expecting quick wins on things in the short or medium-term.”
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