Special report: public services
Darling rejects US open skies plan
Andrew Clark
Wednesday March 3, 2004
The Guardian
Transport secretary Alistair Darling has told his counterpart in Washington that America's latest proposals to create transatlantic "open skies" for airlines are unfair and would damage the interests of British carriers.
On a visit to the US capital, Mr Darling stepped into negotiations over liberalisation of the aviation industry which have been conducted to date by the European commission.
He met the US transportation secretary, Norman Mineta, to object to plans that would let American airlines fly freely within Europe while continuing to prevent European carriers from operating domestic flights in the US.
A spokesman for Mr Darling said: "What's on the table at the moment is not something we can accept."
Negotiations towards "open skies" have been under way between Brussels and Washington since last June. They followed a decision by the European court that Britain was acting illegally in only allowing four airlines to fly on lucrative routes between Heathrow and the US.
The European transport commissioner, Loyola de Palacio, has been arguing for complete liberalisation of the skies on both sides of the Atlantic, allowing any airline to fly anywhere.
However, the US has so far refused to hand over "cabotage" rights, which would allow European airlines to pick up passengers for flights between cities within America.
The Bush administration is thought to be keen to appear tough with foreign businesses during an election year. It has so far refused to raise the limit of foreign shareholdings in US airlines beyond 49%.
British Airways' chief executive Rod Eddington last month attacked the US proposals as "essentially unbalanced". He demanded an end to the "Fly America" policy, which requires all US government officials to fly on home-owned carriers. He called for relaxation of rules covering the leasing of aircraft and crew by one airline to another.
Mr Darling has also met the US homeland security chief, Tom Ridge, to discuss terrorist threats which have caused the cancellation of a succession of BA flights.
He will report back to his European colleagues at a meeting of transport ministers next Tuesday, where he is likely to express reservations about the Charleroi ruling, which concluded that Ryanair was benefiting from illegal state aid.