EU,US draft 'open skies' agreement
Sunday, March 4, 2007
THE European Union and United States negotiators made a breakthrough on Friday in talks on freeing up the transatlantic aviation market, clearing the way for tougher competition and cheaper tickets for consumers, the European Commission said.
After three years of talks and recent turbulence, negotiators reached an "unprecedented" draft agreement that could create a vast "open aviation area", said EU Transport Commissioner Jacques Barrot.
"We have an opportunity to unlock major benefits on both sides of the Atlantic," Barrot said.
"In economic terms, this unprecedented agreement would represent a step change it could be worth up to €12 billion (US$16 billion) in economic benefits and up to 80,000 new jobs," he added.
The commissioner said that he would put the draft agreement to EU transport ministers for a vote at their next meeting on March 22, with a view for the accord to go into effect at the end of October.
Brussels and Washington have long struggled to make progress in the talks which stalled most recently in December after the US withdrew an offer to relax restrictions on foreign ownership of US airlines.
Under the draft agreement, EU airlines would get more leeway on taking big stakes in US carriers although their voting rights would continue to be capped at 25 per cent, an EU official said.
An open-skies deal is supposed to replace the patchwork of existing bilateral air transport agreements between EU members and the US, eight of which the European Court of Justice has ruled as illegal.
The European Commission has not enforced the court decision because it has a mandate to negotiate an EU-US deal.
The EU estimates that an agreement would generate more than 26 million extra passengers over the next five years and create 80,000 new jobs in the EU and US combined.
"By eliminating the bilateral agreements and their restrictions on traffic rights, we can ... obtain a reduction in the cost of tickets for companies and private customers," the Commission said.
In 2005, Brussels and Washington hammered out a pact to liberalise transatlantic air routes such as New York-London, opening up the prospect of many more airlines competing.
As part of the deal, the US government offered to allow foreign investors a bigger role in the marketing, routing and fleet structures of US airlines.
But under pressure from the airline industry and from Congress, the US Department of Transportation withdrew that proposal in December. Although the draft agreement keeps the 25 per cent cap on voting rights, US authorities would no longer be able to block EU airlines from owning a stake greater than 50 per cent. It also gives EU airlines access to the heavily-protected market for US-government related travel market.
AFP
After three years of talks and recent turbulence, negotiators reached an "unprecedented" draft agreement that could create a vast "open aviation area", said EU Transport Commissioner Jacques Barrot.
"We have an opportunity to unlock major benefits on both sides of the Atlantic," Barrot said.
"In economic terms, this unprecedented agreement would represent a step change it could be worth up to €12 billion (US$16 billion) in economic benefits and up to 80,000 new jobs," he added.
The commissioner said that he would put the draft agreement to EU transport ministers for a vote at their next meeting on March 22, with a view for the accord to go into effect at the end of October.
Brussels and Washington have long struggled to make progress in the talks which stalled most recently in December after the US withdrew an offer to relax restrictions on foreign ownership of US airlines.
Under the draft agreement, EU airlines would get more leeway on taking big stakes in US carriers although their voting rights would continue to be capped at 25 per cent, an EU official said.
An open-skies deal is supposed to replace the patchwork of existing bilateral air transport agreements between EU members and the US, eight of which the European Court of Justice has ruled as illegal.
The European Commission has not enforced the court decision because it has a mandate to negotiate an EU-US deal.
The EU estimates that an agreement would generate more than 26 million extra passengers over the next five years and create 80,000 new jobs in the EU and US combined.
"By eliminating the bilateral agreements and their restrictions on traffic rights, we can ... obtain a reduction in the cost of tickets for companies and private customers," the Commission said.
In 2005, Brussels and Washington hammered out a pact to liberalise transatlantic air routes such as New York-London, opening up the prospect of many more airlines competing.
As part of the deal, the US government offered to allow foreign investors a bigger role in the marketing, routing and fleet structures of US airlines.
But under pressure from the airline industry and from Congress, the US Department of Transportation withdrew that proposal in December. Although the draft agreement keeps the 25 per cent cap on voting rights, US authorities would no longer be able to block EU airlines from owning a stake greater than 50 per cent. It also gives EU airlines access to the heavily-protected market for US-government related travel market.
AFP
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