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US, EU accelerating open-skies negotiations


US and European Union representatives hope to cut a second-stage open skies agreement in the first half on 2010, despite key issues remaining unresolved. Of paramount important is ensuring that the first-stage doesn’t unravel during the negotiations.

A growing issue is the stance of the Department of Justice (DoJ), as well as some members of Congress, who oppose alliances and the anti-trust immunity being granted for joint ventures such as Air France and Delta.

In addition to the DoJ, alliances are coming under increasing fire as unions pressure Congress to act against them. Representative James Oberstar, chair of the House Transportation and Infrastructure Committee, has asked the General Accountability Office and DoT to study the issue while the European Union also opened a query into the global airline practice. Supporters counter that opposition to alliances reverses two decades of US aviation policy.

In addition, easing foreign ownership rules is a major point of contention and is also opposed by Oberstar. The first-stage open skies agreement retained the limits but advocates want airlines to be treated by every other industry allowed to invest across borders. The biggest boost came when even the Department of Defense did not buy the argument that foreign ownership would weaken national defense, despite the role airlines play in the Civil Reserve Air Fleet. Even so, unions have expressed strong opposition, saying it weakens their hand in union/management negotiations.

Representatives from both sides of the Atlantic are expected to enter a sixth round of negotiations followed by a February round. Progress has been made on safety, air traffic management, security and the environment. A non-starter issue for the US is cabotage.

The US perspective worries about the unilateral actions taken by Europe on noise and emissions. The US objects to the increasing limitations for cargo carriers as more and more European airports impose overnight flight bans.

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