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EU court strikes down aviation accords with U.S.
Barry James International Herald Tribune
November 06, 2002
Open-skies pacts stifle competition, it says
PARIS The European Court of Justice on Tuesday ruled against ‘‘open skies’’ aviation agreements between individual European countries and the United States, possibly opening the way to increased competition and greater customer choice in trans-Atlantic air travel. The court said the agreements discriminated in favor of European national airlines by giving them preference over rival European Union carriers in operating routes to the United States. The agreements are now ‘‘null and void,’’ said the European commissioner for transport and energy, Loyola de Palacio, who wants to replace them with an overall treaty negotiated by the European Commission. ‘‘This is an historic event’’ that would eventually lead to consolidation and greater efficiency of the European airline system, she said. However, a State Department official in Washington disagreed, saying that ‘‘the current agreements remain in force.’’ He said the U.S. government was carefully studying the ruling before giving its definitive opinion. Most European Union members have signed open-skies agreements, introduced by the United States in 1994, because that allows them greater access to the lucrative North American market and to build partnerships with U.S. carriers. But according to the commission, the open-skies system distorts and fragments the European single market because each country is acting only in its own interests, rather than in the best interests of the market. The commission argues that the system denies passengers the full benefits of airline deregulation in the European single market by denying airlines the destinations restricted by the open-skies agreements to national carriers. Otherwise, any airline registered in the EU is free to operate anywhere in the Union. The European Court of Justice said the open-skies agreements were illegal because they included nationality clauses on the ownership and control of airlines. For example, Air France and its alliance partners can serve a range of destinations in the United States, but other European carriers such as Lufthansa cannot operate services between France and America. U.S. airlines, on the other hand, have access to the entire EU through the web of bilateral open-skies deals. The commission argued that passengers were losing out as a result of the bilateral agreements because they are restricted to a choice between the carriers in their own country or competing U.S. airlines, unless they fly to a hub airport in another country. If passengers in France want to fly across the Atlantic with Lufthansa under existing arrangements, for example, they must first fly to Frankfurt and change planes. The commission, which has championed deregulation of the aviation market since 1992, wants the right to negotiate the kind of global agreement with the United States that would permit Lufthansa to fly to Paris, .......................................
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