Bloomberg:
Europe, U.S. Make `Decisive Progress' in Airline Talks, Says EU
2007-03-02 07:01 (New York)
By Jonathan Stearns
March 2 (Bloomberg) -- European Union regulators plan to
ask EU governments to deregulate the $18 billion trans-Atlantic
airline market, saying talks with U.S. officials this week were
successful in producing a new draft accord.
The European Commission made ``decisive progress'' in
negotiations with the U.S. and will ask EU governments to
endorse an ``open-skies'' agreement on March 22, commission
spokesman Michele Cercone told reporters today in Brussels. The
commission, the 27-nation EU's regulatory arm, will provide
details of the agreement later today, Cercone said.
An open-skies pact would allow EU-based airlines to make
trans-Atlantic flights from any of the bloc's nations instead of
from just their home country. It would also scrap rules letting
only British Airways Plc, Virgin Atlantic Airways Ltd., United
Airlines and American Airlines fly between the U.S. and London's
Heathrow airport, Europe's busiest.
Britain, which accounts for 40 percent of the market,
spearheaded opposition that killed a draft open-skies accord in
June 2004. Efforts to revive the initiative faltered in December
when the U.S. abandoned plans to give foreign investors in its
airlines more control.
Foreign Ownership
The EU had said the new foreign-ownership rule was
necessary to overcome a perceived imbalance resulting from the
existing right of U.S. carriers to fly between nations in
Europe. EU carriers can't offer service between U.S. states.
To make up for the loss of the ownership rule, the U.S.
said it was willing to explore five other areas. These were:
clarifying that foreigners can own as much as 49 percent of non-
voting equity in U.S. carriers; letting EU carriers fly between
the U.S. and third countries such as Mexico; loosening
requirements that federal workers travel on U.S. carriers;
letting EU carriers set up U.S. franchises; and committing to
additional talks after an initial accord is reached.