Summer is over.... but then there is the US election so maybe not...
Anyway, why did this tread end up in A, A & R ? Sure it has to do with routes - but it is also politics and for many of us, jobs ! Back to R & N, please.
I picked this off
Association European Airlines site. AEA in turn seems to have it from Wall Street Journal Europe.
...And the Stalled `Open Skies' One.
After seven inconclusive rounds of talks about a new international "Open Skies" aviation agreement, frustrated EU and U.S. negotiators have been blaming each other in the last few weeks for the perceived failure to achieve a breakthrough. America claims that the Europeans can't move because of unresolved quarrels over jurisdiction between the Commission and EU members. The Europeans accuse the U.S. of not having made sufficient concessions to be able to go beyond a traditional aviation agreement.
Both sides need to realize they have a common interest here. In the past, all governments regulated all aspects of commercial airline activity, from routes to prices. But the Europeans now realize the time has come to rethink its approach. The U.S., in the meantime, has pushed an "Open Skies" doctrine that seeks to deregulate access to airline markets. Open Skies agreements enhance competition among airlines; that's good for consumers. For its part, the EU wants not only to deregulate market access but agree on other matters -- such as state aid or competition policy -- that affect airlines.
Certain aspects of international aviation today are absurd. The EU has its Competition Rules and the U.S. its Sherman Act. Both are intended to stimulate market competition, but each arrives at a different conclusion. So the U.S. gave the green light to innovative strategic airline alliances with only minor undertakings for the applicants, whereas the Commission felt obliged to impose inhibiting conditions on the very same alliances between the very same airlines on the very same routes. The Europeans felt that only an entirely new regulatory framework such as Open Skies could entice both the EU and the U.S. to gradually make their policies meet.
And meet they must. After 9/11, a new comprehensive regulatory framework is urgently needed that goes further than just market access. September 11 sparked the international war on terrorism. The vulnerability of civil aviation called for far-reaching and sophisticated security measures that provide the greatest possible degree of protection, whilst at the same time attempting to minimize any adverse effects on ordinary citizens, and hassle for the traveling public. We are still far from having achieved these objectives. Common, internationally-agreed standards of security are still absent. And given the declared intention of insurers to terminate coverage against bio-chemical terror attacks, agreement is needed in order not to leave civil aviation without risk protection.
But it doesn't stop there. To what extent, for example, should anti-terror measures be financed by governments or by passengers? As long as there is no consensus, competition will remain distorted and governments will have an endless number of excuses to go on bailing weak airlines out. We badly need an international agreement on state aid. Granted at whatever level -- regionally, nationally or internationally -- state aid either protracts the illness or prevents the market from finding a cure.
It's ironic that the two champions of airline liberalization -- the United States and Europe -- should fail to grasp the opportunity to mend such obvious deficiencies. Since 1978, the U.S. has been in the forefront of national and international aviation liberalization. The Europeans followed suit and liberalized their internal airline market in the 1980s. Both sides have the valuable experience needed to close the ranks and come up with a joint framework that fits the post-9/11 world.
Such an agreement would not only be security-related -- as important as that in itself is. It would be a response to fresh global challenges. At a time of de-industrialization in Europe, and emerging economic powers in Asia, traffic patterns will dramatically change. Airlines will need greater opportunities to operate worldwide. They need to gain access to international finance markets, which they are currently denied by bilateral air-service agreements that restrict foreign ownership of national carriers, to enable them to become truly global players. Future success will depend on an international regulatory framework that provides sufficient stability for growth, irrespective of extraordinary events.
The EU should not fall into the trap and publicly drag its internal EU institutional quarrel out much longer. The Commission is convinced that bilateral aviation agreements involving member states violate the principle of non-discrimination, because they don't offer all carriers equal market access. The European Court of Justice recently sided with the Commission, giving it broad power over aviation. But member states are questioning how far its mandate extends. The U.S. has its own domestic difficulties in reaching a new international agreement ahead of national elections.
And yet, despite these domestic woes on both sides of the Atlantic, the fact remains that the world has changed. Bilateral market access agreements are showing their age. Europe and the U.S. are economic and political superpowers. By assuming leadership they can create a template other nations can follow, so that, eventually, a new market-oriented framework will emerge which allows passengers to benefit from undistorted global competition within the aviation industry.
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Mr. Schulte-Strathaus is secretary general of the Association of European Airlines.
874 words
19 August 2004
The Wall Street Journal Europe