From the South China Morning Post: Tuesday, February 5, 2002
Tin-pot flights of fancy under threat for flag carriers
JONATHAN BRAUDE
If Antonio Tizzano has his way, bilateral air services agreements between European Union countries and the rest of the world will be regarded as illegal and will have to be renegotiated.
What is more, the days when every tin-pot European nation can proudly boast its own national airline will soon be past. There will be only one European market in air travel and only one European airspace.
The United States response to the new situation may be bellicose ... Another transatlantic trade war may be hard to avoid.
[Tizzano, Advocate General of the ECJ] has just delivered himself of an "Opinion" in a group of cases brought by the European Commission against the governments of Britain, Germany, Belgium, Sweden, Denmark, Finland, Luxembourg and Austria.
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The Opinion stops short of recommending the EC be given exclusive negotiating rights over all EU air traffic agreements [but] the effect of ruling exclusive bilateral deals illegal would be similar.
.... And the precedent will affect bilateral agreements with every non-EU nation from China to Chile ... there is not much point in a flag-carrier with no exclusive routes from national airports.
So far the US has said only that it was studying Mr Tizzano's Opinion. But Washington may be reluctant to tear up all its bilateral agreements, especially since it does rather nicely from the separate deals.
Under open skies arrangements, Washington has negotiated bilateral deals with 56 nations. In many cases, these allow US airlines to pick up passengers inside the partner country and fly them to another airport. A US airline could, for instance, carry German passengers between Frankfurt and Berlin. Yet if EU airlines land in New York, they cannot pick up passengers and fly them to Dallas.
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What the EU wants is for Ms de Palacio's team to negotiate for the EU as a whole, giving it far more leverage and the chance to negotiate a real open skies agreement with equal rights on both sides to negotiate slots at any airport they choose.
It is an arrangement which would force Britain, for instance, to allow foreign airlines access to profitable transatlantic routes out of Heathrow.
...
But an end to 50 years of nation-to-nation deals would also give a big airline such as BA the chance to buy up a smaller European carrier and fly from its home airports.
If the US is true to its free-trade principles it will recognise that negotiating a Europe-wide open skies deal would be of benefit to both sides. Its own airlines would be able to fly passengers between EU countries in return for similar rights for European carriers flying between points in the US.
If Washington chose to protect its own airlines from European competition on domestic flights, it would have no scruples in launching another trade war.
But at least it would be picking on someone its own size. With the EU, Washington would be dealing with a single negotiating partner of equal weight and economic importance, instead of dividing and ruling a group of 15 minnows.