On the surface, the proposed Open Skies deal between the EuropeanUnion and the United States, which was approved unanimously by Europe’stransport ministers last month, looks like a tremendous agreement withimmediate benefits for almost all parties concerned.
The pact, agreed after four years of talks, will allow any EU airline tofly from any city in the 27-nation bloc to any city in the United States andvice versa.
The treaty will also facilitate EU airline consolidation by allowing airlinesto merge without the risk of jeopardising routes they have or are planningto the US.
Most importantly, and in part the urgent need for the deal, is that theEU-wide treaty with the US will replace existing national bilateral treaties,which were declared illegal by the European Court of Justice in 2002. Allthat looks like a perfect win-win situation for every airline and countryconcerned.
Opponents, however, disagree.
The reason is that the rights of European airlines to own American carriershave not changed, nor will their rights to operate revenue-earningflights between American cities. No wonder then that BA chairman MartinBroughton has dismissed the deal as “a con trick”.
Although there should be serious doubts whether investments in UScarriers at this stage would make much sense, the BA chairman wants Europeanairlines to be allowed to buy and control American carriers, insteadof being restricted to 25 percent of the voting shares. He also insists thatEuropean carriers should be allowed to pick up passengers in one US cityand fl y them to another destination in the US.
Second-best is probably the best way to describe the Open Skies deal,despite assurances by EC vice president Jacques Barrot that the US ownershipand control issues would eventually be resolved. Because America isbent on protecting its weak airlines and their workers.
So, with neither Republicans nor Democrats being interested in seriouslyopening up the US transportation markets, until the American carriers arein a position to be the acquirer – and that is clearly some years away – thechances of concluding a truly “Open Skies” pact, even in the second phase,are extremely remote if not non-existent.
As far as cargo is concerned, the biggest beneficiaries of the proposal toallow US airlines unlimited traffic rights to fl y onwards within the EU andbeyond to the rest of the world, are clearly the US integrators FedEx andUPS.
Not surprisingly, European cargo carriers as well as British Airways haveargued that, in case a second-phase agreement is being tabled, the EUhas already given away its negotiating trumpcard without getting anythingsubstantial in return.