EU Transport Council to discuss progress in talks with US
ATW, Monday March 08, 2004
The EU Transport Council tomorrow will discuss the progress the European Commission has made in its negotiations with the US on achieving a transatlantic Open Aviation Area.
During the third round of talks in Washington last month, US authorities expressed their desire to reach an interim deal before summer. "Given that both sides agree on [only] a limited list of items, such timing is optimistic," an insider told ATWOnline. He added that despite the limited scope of agreement, "the US side has become more concrete and is willing to accommodate some of the [EC's] requests."
Reportedly, the US has proposed to permit an EU carrier to operate to and from the US from any international point provided the route also includes a destination within the EU. As a consequence, the US would allow all mergers between EU airlines without restricting their access to bilateral transatlantic services--which is essential for the nearing Air France acquisition of KLM. In return, the US wants unlimited fifth freedom for US airlines within and among EU nations.
The US continues to oppose cabotage, however, while the prevailing view in the EU is that fifth freedom rights in the EU are equivalent to cabotage in the US. Even were US negotiators to approve cabotage, it would take an act of Congress to change US law.
The US also proposed unlimited capacity for all US and EU carriers over the Atlantic and no restrictions would exist on routes or access points, with no carve-out on London Heathrow or Gatwick. Charter airlines would enjoy at least the same rights as scheduled carriers and all-cargo operators would benefit from worldwide seventh freedom rights.
On a visit to Washington last week, UK Transport Secretary Alistair Darling told US Transportation Secretary Norman Mineta that the latest US proposals are unfair and would damage the interests of British carriers, The Guardian reported. "What's on the table at the moment is not something we can accept," a spokesperson for Darling said. AEA also has voiced concern "whether the US proposal for interim agreement provides for added value for the European airline industry."
According to information obtained by ATWOnline, the EC has threatened to terminate existing fifth freedom rights if the US blocks cabotage. The US position has been that the EC does not have the authority to renounce treaties between sovereign nations.--Cathy Buyck
EU Transport Council tells EC to keep negotiating with US
ATW, Thursday March 11, 2004
EU Transport Council asked the European Commission to continue its negotiations with the US aimed at achieving a transatlantic Open Aviation Area and said it will review the situation during its June 10-11 meeting. The call to pursue a fourth round of talks, scheduled for the week of March 29 in Brussels, is a de facto rejection of the latest US proposal for an interim deal that would put the transatlantic bilaterals into conformity with EU law (ATWOnline, March 8). The US had offered more flexibility of ownership restrictions, which at present limit the participation of voting stock of US airlines held by foreign capital to 25%. "The progress, while encouraging, falls short of the objectives of the mandate given by the Council," the Commission said. As expected, the EC also asked the Council for a mandate to negotiate with the countries of the western Balkans as well as Morocco, Jordan and Lebanon. No firm decision was made by the Transport Ministers but the issue is under examination.--CB