Shannon stopover to be phased out by 2008

[A350]

''The Minister for Transport, Martin Cullen, has signed an agreement with the US Secretary of Transport, Norman Mineta, which will see the phasing out of the Shannon stopover by April 2008.

The stopover will go under an open skies agreement between the EU and the US due to be finalised next week.

The transition period will begin in November of next year, during that time the number of flights having to stop in Shannon will be reduced to one in four on any scheduled route.

Also three new US destinations will be made available to Aer Lingus.

The stopover will be lifted from all cargo flights from the outset of the transition period.

The minister made the announcement in New York where he is meeting officials from the city's mass transit authority''

Source RTE

[akerosid]

This is very disappointing; quite apart from the legal basis of the Irish govt negotiating with the US, which I would question (since it surrendered this to the EU), why do we have to wait until next November?

Would it kill them to allow more t/a flights for next Summer; after all, Shannon is fine for flights in the Summer. I wonder how US carriers will view this?

More to the point, how will the EU view it? If every country went around negotiating side deals, it would make a nonsense of the whole thing. This is surely open to question on competition grounds.

[Bearcat]

it actually falls into the hands of AL. They wont be able to beef up until 2007/08 re crewing/ aircraft.

Its all a stitch up and agree 100%. On a positive side there is now light at the end of the tunnel as against vica versa.

Maybe FR might lapse and go long haul even after what O'L says about never venturing on the dark side.

Short term...crap / Long term there is a definite end. Deo gratis and let competition begin for the good of the irish economy.

[MarkD]

Any word of Cullen heading to Ottawa to do a deal with Lapierre? In fact they might have bumped into each other in Mineta's lobby given he also signed an open skies deal today...

[akerosid]

I saw that in one of the A.net news bulletins; I actually thought US/Canada Open Skies had been done a while back.

Unfortunately - and not surprisingly - no, nothing doing there. It takes initiative and imagination ... not in our department! It'll take Canada revoking our bilateral for our lot to take things seriously.

Interesting comment from the US DOT: it was dependant on EU/US Open Skies. If Open Skies goes ahead, does this overrule it; what if Open Skies is introduced from next Summer; do we still have to wait until next November?

Cullen has also said that he has made this deal a pre-condition of agreeing to Open Skies? Who are you kidding, buddy?

If Open Skies is introduced, you won't be able to stop it. I sincerely hope that the EU Commission keeps an eye on its own credibility and shoots this down ... Open Skies should mean Open Skies for all.

[Bearcat]

what's good for ireland? forget out the national airline being put in a corner.......would you prefer competition/ open skies/choice or oligoply/limited routes/ limited cargo /pax growth potential?

The only way to pacify SNN to some degree is phased basis.

Irelands gain for short term pain.

[neidin]

This is by my no means a "done deal". All of the EU Transport Commissioners have to sign it off - plus the EU Commission. Ireland has failed in similar deals in the past at the EU hurdle. If Knock, Kerry or Cork protest to the EU - that could scupper it. Then there would be full openskies in Ireland from Nov 2006 and the Irish Govt could blame it on the EU and one of the Irish airports. The gaem has still some way to go.

[ryan2000]

Does anyone seriously believe that Cork or Knock will protest to Brussells over the heads of the Irish Government. They tolerated the previous highly restrictive bilateral for decades.

In any event there is nothing stopping Aerlingus from starting ORK JFK but their sights are elsewhere now.

[Jordan D]

Apologies - I know this is meant to be a professional forum, and so might rub people the wrong way by asking this: I've been reading this about the Shannon stopover - and now want to ask, what does this mean? I have no background to the issue, and would like to know.

Any answers (PM by all means) appreciated.

Jordan

[akerosid]

No problem, Jordan - PM on its way to you now.

Neidin, I don't think any of the regional airports will object, although there is still plenty of scope for the EU to object. The legality of this agreement is, I think, suspect. There was an ECJ judgment by which power to negotiate bilaterals was ceded to the EU Commission; if one EU country can go off on its own and negotiate a deal which undermines Open Skies, then others can and it makes a nonsense of the whole thing. If the EU wants to maintain some credibility, it needs to look into this.

And for goodness sake, let something happen in 2006; why waste a year! It's quite possible to protect SNN while at the same time growing traffic at DUB. If it's agreed that traffic at SNN stays as it, then airlines can double traffic to DUB. Shouldn't be too difficult to organise. It makes it much easier for EI as well, which has got three new destinations. Doubling its routes ex DUB would yield enough for three daily nonstops.

However, the biggest obstacle is not the EU or our govt now; apparently, the Americans are going to stick a spanner in the works over the whole ownership issue. This is extremely frustrating, seeing as it doesn't actually involve Ireland. However, it should not be a long delay.

[asianfly]

This 'deal' is yet another fudge by our esteemed government. I suspect the reason the timeline for getting rid of the stopover is 2008 is merely to keep the boy and girls down in the midwest quiet prior to an election expected next year.
I find it amazing that the rest of the country has to pay for the inefficiencies of maintaining the stopover in Shannon. It hampers Aer Lingus, limits competition, leads to higher fares, and negatively impacts all the other airports in Ireland. It should be scrapped immediately. How would SNN like it if NOC or ORK demanded that all flights to Europe from SNN must stopover at their airports first! Twisted logic, but that is exactly what the senseless stopover is.
If a market exists for an airline to fly between two points in the US and IRL, then let them fly it. Why the gov has to stick its nose in and retard growth is beyond me. Rant over!

[ryan2000]

Shannon Airport , the Great Sacred Cow of Irish Politiics has dictated Irish Aviation Policy for decades.

The bilateral and the questionable deal for Ryanair which is now been investigated by the European Commission are all part of the same twisted logic.

The statement by Michael O'Leary this week that yields at Shannon continue to disappoint have caused renewed concern among people in region.

The reality is that Shannon will be much more secure when it behaves and is treated like any other european airport and stops skewing the Irish Aviation market with its daft policies.

[WHBM]

The statement by Michael O'Leary this week that yields at Shannon continue to disappoint have caused renewed concern among people in region.

Doubtless a prelude to some further negotiations on squeezing rates downwards. Has M O'L ever said that yields were satisfactory anywhere ? And yet the FR overall financial results and profits prove otherwise.

[ElNino]

let something happen in 2006

It makes it much easier for EI as well, which has got three new destinations. Doubling its routes ex DUB would yield enough for three daily nonstops.

I think, as has been pointed out, that EI can't do this in 2006, due to shortage of aircraft and crew. 2007 onwards seems ideal for EI's purposes.

[MarkD]

worth noting that EI have committed to new aircraft having crew rest - so if they are looking at 350 then they are going to have to delay ultra long haul or get some crew rest equipped 330s in the interim - or get 777s if they can be got by 2008.

[mark_heg]

It's an interesting road ahead. I can't wait to see whether a trans-atlantic will commence from cork in the next year or so. CO and DL have started many new interesting flights to europe.

[akerosid]

CO seems to me most likely for ORK-EWR, although unfortunately, because the new deal only starts from next November, it'll probably be Summer '07 before it happens. Not quite sure if 763 could do nonstop from ORK due to runway length, but there again, even if it could, I don't see DL being quite as innovative as CO on new routes.

Unfortunately, the key concern now is the Open Skies talks between the EU and US, which are not going at all well. They're still hung up on the whole LHR thing, which is pretty frustrating; basically, it comes down to airline ownership -v- LHR. BA seems to be pressing for the right to buy all of AA and I can tell you that hell will freeze over (or Pat Robertson will vote Democrat) before that happens ... which, I suspect is what BA wants. LHR-US is BA's most important sector and I strongly suspect they want to scupper or stall any possibility of new US carriers (or bmi) on that route as long as possible.

However, even if talks fail, I think the agreed deal might be able to form the basis of a transitional period, as there is scope for talks between the US and other EU countries, outside the current talks (as long as the resulting agreement doesn't put any other country at a competitive disadvantage). Since our bilateral is the most counter-productive of any EU country, I think it might be able to stay on. It doesn't really serve anyone's interests for it to be lost. Let's not waste more time than necessary.

As to aircraft, if the new deal comes into effect from next November, I recall that AC may have A340s it might want to get rid of; sure, 340s aren't the first choice, but they should be relatively easy to integrate. Another possibility, I think, would be NW. It is in serious trouble (like DL), but has several A330s on order for next year. Now, could it be persuaded to defer these? OK, PW powered, but hey, like the 340s - better than a poke in the eye ...

Finally, with the EI L/H order due soon, I would be very surprised if there weren't arrangements made for interim aircraft. Both potential aircraft - the 350 and 787 - won't be available until 2010-12, so the interim proposals may be pretty important.

Lots to play for, but let's hope this week's talks end up with something positive. How frustrating to be held back by something of no particular interest to Ireland.

I might also add, on the new aircraft front, it\'s widely expected that EK will replace some/all of its A340-600 orders for A350s (or else risk losing deposits). This means a significant number of new Airbus delivery positions for 2007+. Obviously, they needn\'t be taken as A340-600s ...

[Bearcat]

Why do we ever get excited?

Todays indo.


Hopes fade for imminent deal on 'open skies'



HOPES of a deal to liberalise transatlantic air traffic this week are fading, just days after a new agreement was agreed on phasing out the Shannon stopover.

It's not expected that the final agreement on a new 'open skies' deal between Europe and the US will be finalised before next spring, at the earliest.

Opposition has been growing in Britain, with British Airways warning that recent American offers to relax foreign airline ownership rules don't go far enough.

The likelihood of an imminent deal in Washington spurred the Irish government to try and first finalise a special transition understanding to phase out the Shannon stopover by 2008.

At the moment, one in two of all transatlantic flights from Ireland must go through Shannon.

In Brussels, European Commission officials have stressed this side deal forms part of an overall package.

Commission observers in Washington attended the meetings between the Transport Minister Martin Cullen and US officials last week, they added.

After ten years of complex talks, the looming delay will frustrate many European airlines which hope to consolidate their US links.

Mr Cullen claims that the benefits to Aer Lingus and the tourism industry outweigh the impact on Shannon Airport. Although a delay of a few months would make little long-term difference, it will fuel fears that the recent momentum will be lost and the talks will be frozen again.

[akerosid]

It is annoying, particularly as the last obstacle doesn't exactly concern us (see my previous post, above). It's unlikely there will be agreement this week, but there are likely to be talks early next year. The EU needs to tone down its demands; anything over 49% of a US carrier is unlikely to be realistic.

However, from our perspective, I think we can actually take advantage of the fact that the proposed changes in the Irish-EU bilateral are not so dramatic as to compromise anyone's else's competitive position. This means that they could/should still stay as an unofficial agreement between the two sides. Remember that the EU has the discretion under Reg 847/04 to approve talks between members states and the US (or indeed any country with which the EU is holding talks) ... If we regard this as the transitional arrangement and continue to proceed on this basis, I'm not sure what the EU could do about it.

Could the US object? Possibly, but is it in their interests to do so? There is now something we didn't have before - a firm deal and a schedule to end the stopover. From EI's point of view, they can work with this; they know when they need to have new aircraft (as do the aircraft manufacturers competing for their order), so it doesn't really help anyone to scupper this.

There will be calls, of course, from the SNN lobby, but although it's not a great deal, I think the government should stick with it. Play it quietly - run silent, run deep - and we should be able to get this deal to slip under the radar.

[MarkD]

akerosid

AC first 777 delivery is not until 2007 so while replaced aircraft before then is possible it's not all that likely, and there's no guarantee the 343 or 333 will be the first aircraft replaced - it depends on the state of the remaining 762s and the desire to rid themselves of the two 345s.