Open Skies
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The pace of lobbying and basically doing down the proposed O/S deal intensified today, with the UK Transport Secretary, Douglas Alexander, saying that more work needed to be done on it. BA, of course, is lobbying hard against it, but it's still not clear what other countries are against it. I am not aware of any.
Interestingly also, Jacques Barrot said today that it may be possible to change the voting process to qualified majority, which would make life a lot easier for getting the deal through, although how that can actually happen is not clear. It is a treaty with a foreign state, in which case it should, unfortunately, be unanimous. http://www.borsaitaliana.it/bitApp/n...267478&lang=en
The UK govt says that there are a lot of issues which have not been addressed, but notwithstanding, what is included is very positive and will benefit every EU economy, including the UK.
Perhaps the key question is, what does the UK believe will happen if it vetoes the deal? As far as BA is concerned, the longer is can be put on the long finger the better. I really, really don't think it cares too much about the concessions that the US has - or might - make; the combined value of these won't come near to the value of BA's LHR position. The UK may argue for cabotage, increased ownership, yada, yada, yada, but does anyone really see BA actually flying US domestic flights, much less wanting to trade the position it has today for that right? No way.
Has the UK govt considered the possibility that the Americans will give strong consideration to revoking Bermuda 2 and also, the potential for Britain's relationship with its other EU partners if it vetoes a deal which is worth billions to them? There's a lot riding on this and a lot to lose with the wrong decision; is it really worth a huge cost to UK PLC, to save BA's cosy little position at LHR ...
Interestingly also, Jacques Barrot said today that it may be possible to change the voting process to qualified majority, which would make life a lot easier for getting the deal through, although how that can actually happen is not clear. It is a treaty with a foreign state, in which case it should, unfortunately, be unanimous. http://www.borsaitaliana.it/bitApp/n...267478&lang=en
The UK govt says that there are a lot of issues which have not been addressed, but notwithstanding, what is included is very positive and will benefit every EU economy, including the UK.
Perhaps the key question is, what does the UK believe will happen if it vetoes the deal? As far as BA is concerned, the longer is can be put on the long finger the better. I really, really don't think it cares too much about the concessions that the US has - or might - make; the combined value of these won't come near to the value of BA's LHR position. The UK may argue for cabotage, increased ownership, yada, yada, yada, but does anyone really see BA actually flying US domestic flights, much less wanting to trade the position it has today for that right? No way.
Has the UK govt considered the possibility that the Americans will give strong consideration to revoking Bermuda 2 and also, the potential for Britain's relationship with its other EU partners if it vetoes a deal which is worth billions to them? There's a lot riding on this and a lot to lose with the wrong decision; is it really worth a huge cost to UK PLC, to save BA's cosy little position at LHR ...
Last edited by akerosid; 6th Mar 2007 at 18:46. Reason: Addition of link
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There have been huge obstacles to this deal on both sides of the Atlantic in recent years but this time, in my opinion, it seems they are determined to push this agreement through. BA, Virgin or any other airline are not going to stop it just to protect their cosey positions. You can't stand in the way of progress...
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BA are like the Shannon lobby in Ireland i.e block progress in their own selfish interests. My gut feeling is that it'll go through this time and that any outstanding issues will be addressed later.
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Positive Shannon lobby
Haven't you noticed that the "Shannon lobby" has accepted the inevitability of Open Skies for some time past? There hasn't been a whisper of protest about the forthcoming change. Their current campaign seems to centre on lobbying for road access improvements and tourism marketing support for the West of Ireland.
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Air France/KLM have come out firmly in favour of the agreement in this press release.
Goldman Sachs have advised that they think the risks to BA are overstated - because of the difficulty for competitors in acquiring a significant number of LHR slots.
Goldman Sachs have advised that they think the risks to BA are overstated - because of the difficulty for competitors in acquiring a significant number of LHR slots.
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Just out of curiousity - and I do not know the answer in advance:
What percentage of slots at LHR are held by UK domestic carriers, and what percentage by foreign carriers?
And - similarly at JFK?
What percentage of slots at LHR are held by UK domestic carriers, and what percentage by foreign carriers?
And - similarly at JFK?
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Do you mean domestic carriers, or domestic routes? (Slots are of course not normally route-specific).
Should be possible to find out what share of scheduled departures are domestic and international, or what share are domestic-flag and foreign-flag.
Should be possible to find out what share of scheduled departures are domestic and international, or what share are domestic-flag and foreign-flag.
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Originally Posted by barit1
Just out of curiousity - and I do not know the answer in advance:
What percentage of slots at LHR are held by UK domestic carriers, and what percentage by foreign carriers?
What percentage of slots at LHR are held by UK domestic carriers, and what percentage by foreign carriers?
At the start of the W06 season, of 9229 weekly movements at LHR:
- BA: 3784
- bmi: 1057
- (Lufthansa: 412)
- Virgin: 298
- (Aer Lingus: 274)
- (SAS: 274)
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If the UK says no ...
Let's fast forward a few weeks and assume that the UK does wreck the whole thing. Now, strictly speaking, the EU should say, right, all systems stop. Everyone has to revoke their bilaterals and we get into this silly, time consuming and utterly wasteful exercise, just because BA grabbed the British minister by the b****s and attached an electrode.
Q: Is the EU Commission really going to grant SO much power to one airline that it will effectively let them get away with murder. Remember, all this stuff about cabotage and foreign ownership of US carriers is really just a smokescreen, asking for something BA knows will sink the whole thing. No one will be happier if this thing sinks without trace for years to come. For Britain to veto this would be a HUGE victory for BA.
So, instead of following the BA script, which would allow BA not just to hold its position at LHR, but also to mess things up for all of its EU competitors, why not (for once) take a sensible approach and allow the other 26 countries who want a deal ON THE BASIS THAT THE COMMISSION RECOMMENDED to go forward in that way. Now, I know that unanimity is required for the vote at Council level (this was confirmed today), but if these 26 countries were to do a deal with the US on the basis of the deal agreed, with a community aviation clause (excluding the UK), the Commission could turn a blind eye to it and everyone could win.
Legal? In this situation, it's a case of "legal schmegal"; an obstacle has been wilfully placed by one airline and its glove puppet and this is supposed to hold the rest of Europe back indefinitely. "Dream on"; this is something that needs to happen. Let's not let BA or the UK govt stand in the way.
Q: Is the EU Commission really going to grant SO much power to one airline that it will effectively let them get away with murder. Remember, all this stuff about cabotage and foreign ownership of US carriers is really just a smokescreen, asking for something BA knows will sink the whole thing. No one will be happier if this thing sinks without trace for years to come. For Britain to veto this would be a HUGE victory for BA.
So, instead of following the BA script, which would allow BA not just to hold its position at LHR, but also to mess things up for all of its EU competitors, why not (for once) take a sensible approach and allow the other 26 countries who want a deal ON THE BASIS THAT THE COMMISSION RECOMMENDED to go forward in that way. Now, I know that unanimity is required for the vote at Council level (this was confirmed today), but if these 26 countries were to do a deal with the US on the basis of the deal agreed, with a community aviation clause (excluding the UK), the Commission could turn a blind eye to it and everyone could win.
Legal? In this situation, it's a case of "legal schmegal"; an obstacle has been wilfully placed by one airline and its glove puppet and this is supposed to hold the rest of Europe back indefinitely. "Dream on"; this is something that needs to happen. Let's not let BA or the UK govt stand in the way.
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JFK schedules for March (source OAG):
Departures by US carriers to US destinations: 12623
Departures by US carriers to non-US destinations: 3359
Departures by non-US carriers to US destinations: 307
Departures by non-US carriers to non-US destinations: 4000
Departures by US carriers to US destinations: 12623
Departures by US carriers to non-US destinations: 3359
Departures by non-US carriers to US destinations: 307
Departures by non-US carriers to non-US destinations: 4000
LHR the only tradeable asset
I do not agree that giving up open access to lhr is a good thing at this stage in Aviation's development. Access to lhr is the ONLY tradeable asset in this debate that Europe has, and that USA wants.
For the bureaucrats in Europe to give this up for NO gain whatsoever is just like a lot of other weak-minded stuff that the Community drags the UK into.
It is weak thinking, and pathetic bargainning. The USA used to out-bargain Russia and China - and they are good at negotiating. To the USA the Brussels lot are a simple pushover.
For the bureaucrats in Europe to give this up for NO gain whatsoever is just like a lot of other weak-minded stuff that the Community drags the UK into.
It is weak thinking, and pathetic bargainning. The USA used to out-bargain Russia and China - and they are good at negotiating. To the USA the Brussels lot are a simple pushover.
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Spot on Ancient Observer.
We risk opening the floodgates with only a short term advantage to UK airlines.Its no wonder other countries and their airlines find open skies so appealing.[I am not BA or Virgin]
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Now I am a simple young(ish) Wannabee who doesn't know a lot about the intricacies of such negotiations. However, I really would be grateful if someone could explain the following:
(From Today's Telegraph)
"It would allow a US airline to fly to the UK and on to another European city or the Middle East, Africa or Asia. But a European carrier would not get the same access to the massive US market. Critics of the deal also question the different levels of foreign control permitted of US and European airlines, which would allow a US airline to own 49pc of a European rival while EU carriers could only acquire a 25pc voting stake and an economic stake of up to 49pc".
How is that in our interests?
Please don't shout! Its a genuine question!
(From Today's Telegraph)
"It would allow a US airline to fly to the UK and on to another European city or the Middle East, Africa or Asia. But a European carrier would not get the same access to the massive US market. Critics of the deal also question the different levels of foreign control permitted of US and European airlines, which would allow a US airline to own 49pc of a European rival while EU carriers could only acquire a 25pc voting stake and an economic stake of up to 49pc".
How is that in our interests?
Please don't shout! Its a genuine question!
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The main concession that the Americans have made is to allow any EU airline to fly from any EU point to the US, opening the door to 'seventh freedom' operations. In fact it also extends to Switzerland, so for example Lufthansa (which owns Swiss) could operate Zurich - USA as an LH service. Air France/KLM could become a single brand.
Aer Lingus will get access to the extra US destinations they desperately want. Iberia will have their way cleared to get a closer cooperation with American Airlines within the OneWorld Alliance.
US airlines don't want or need extra rights to fly within Europe, apart from the parcels carriers like FedEx they don't use the rights they already have. Similarly apart from Virgin America, no European airline is interested (for the foreseeable future) in setting up shop over there.
One disappointment is that the US have hardly moved on their protectionist attitude to traffic on government business, that is nearly all reserved for US carriers.
Aer Lingus will get access to the extra US destinations they desperately want. Iberia will have their way cleared to get a closer cooperation with American Airlines within the OneWorld Alliance.
US airlines don't want or need extra rights to fly within Europe, apart from the parcels carriers like FedEx they don't use the rights they already have. Similarly apart from Virgin America, no European airline is interested (for the foreseeable future) in setting up shop over there.
One disappointment is that the US have hardly moved on their protectionist attitude to traffic on government business, that is nearly all reserved for US carriers.
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Don't they have a protectionist approach to just about everything?
Whilst I can see your points and understand them, I still don't really see why the line of reasoning that no-one really wants these rights should result in what can only be described as an alarmingly sloped playing field?
Whilst I can see your points and understand them, I still don't really see why the line of reasoning that no-one really wants these rights should result in what can only be described as an alarmingly sloped playing field?
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In the overall scheme of things, I don't see it as being alarmingly one-sided. It is what it is; "it does exactly what it says on the tin" ... it is an Open Skies deal. Any airline from the EU will be able to fly from any airport in the EU to any point in the US. That's what it should have been all along.
BA and VS are fighting a rearguard action now, to try and persuade the govt to veto the deal; both - along with the Transport Secretary and BMI - are to appear before a Commons Select Cttee hearing today on the matter.
http://www.ananova.com/news/story/sm_2238987.html?menu=
I think it really is relevant to say that the concessions being granted by the US are irrelevant, because both airlines are complaining about what they are getting in return and if they're not going to use any concessions they are getting/ would get in response, then that has to be relevant.
The reality is that the Americans could multiply these concessions one hundred fold (or more) and BA/VS would still be opposed; they have the one thing they covet more than anything else and that's LHR-US access. And they're going to do everything in their power to keep it that way.
If it were Qualified Majority Voting at EU level, then I would say "no problem", but the fact is that Britain's veto could torpedo the deal for the 27 countries that actually want it (the other 26 EU countries and the US) and if they were to use that veto, it would be in defence of a very anti-competitive arrangement. The EU would then be after all EU countries to abandon their bilaterals (and you can be sure they would start with the UK and Bermuda 2, if the Americans don't renounce it first!), so one way or another, the UK needs to understand that Bermuda 2's time is up.
It needs to be made very clear to the UK that there is no upside to the use of its veto; Britain - as a whole, rather than the sectional interest of BA/VS - stands to gain from Open Skies. To reject the deal would see Britain's relationship with its EU partners damaged and would leave the UK isolated and all for a pyrrhic victory, because its protection of B2 and BA/VS at LHR would only be temporary. It would be naive for the UK to believe that there would be no negative consequences arising from a veto which would cause mayhem for the EU Commission, its 26 EU partner states and the US.
BA and VS are fighting a rearguard action now, to try and persuade the govt to veto the deal; both - along with the Transport Secretary and BMI - are to appear before a Commons Select Cttee hearing today on the matter.
http://www.ananova.com/news/story/sm_2238987.html?menu=
I think it really is relevant to say that the concessions being granted by the US are irrelevant, because both airlines are complaining about what they are getting in return and if they're not going to use any concessions they are getting/ would get in response, then that has to be relevant.
The reality is that the Americans could multiply these concessions one hundred fold (or more) and BA/VS would still be opposed; they have the one thing they covet more than anything else and that's LHR-US access. And they're going to do everything in their power to keep it that way.
If it were Qualified Majority Voting at EU level, then I would say "no problem", but the fact is that Britain's veto could torpedo the deal for the 27 countries that actually want it (the other 26 EU countries and the US) and if they were to use that veto, it would be in defence of a very anti-competitive arrangement. The EU would then be after all EU countries to abandon their bilaterals (and you can be sure they would start with the UK and Bermuda 2, if the Americans don't renounce it first!), so one way or another, the UK needs to understand that Bermuda 2's time is up.
It needs to be made very clear to the UK that there is no upside to the use of its veto; Britain - as a whole, rather than the sectional interest of BA/VS - stands to gain from Open Skies. To reject the deal would see Britain's relationship with its EU partners damaged and would leave the UK isolated and all for a pyrrhic victory, because its protection of B2 and BA/VS at LHR would only be temporary. It would be naive for the UK to believe that there would be no negative consequences arising from a veto which would cause mayhem for the EU Commission, its 26 EU partner states and the US.
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The EU is very concerned that there should be a level playing field within Europe, first and foremost that is what the single market is all about.
It is anathema to them that some EU airlines should hold a competitive advantage over others. That’s why they don’t like restrictive bilaterals like Bermuda 2, but also why they don’t like US-style Open Skies bilaterals which give airlines like KLM and Lufthansa the opportunity to cosy up to their US partners.
However the level playing field in Europe can only be achieved by dismantling the whole Europe-US bilateral structure, and that requires the cooperation of the US.
It’s pointless saying ‘The EU has given up Heathrow to the Americans’, as far as the EU is concerned Heathrow-US routes are just as closed to Lufthansa and Iberia as they are to Delta and Continental.
Sorry if I’m sounding more like a European than a Brit, but that’s what I am.
It is anathema to them that some EU airlines should hold a competitive advantage over others. That’s why they don’t like restrictive bilaterals like Bermuda 2, but also why they don’t like US-style Open Skies bilaterals which give airlines like KLM and Lufthansa the opportunity to cosy up to their US partners.
However the level playing field in Europe can only be achieved by dismantling the whole Europe-US bilateral structure, and that requires the cooperation of the US.
It’s pointless saying ‘The EU has given up Heathrow to the Americans’, as far as the EU is concerned Heathrow-US routes are just as closed to Lufthansa and Iberia as they are to Delta and Continental.
Sorry if I’m sounding more like a European than a Brit, but that’s what I am.
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So how exactly is this going to benefit the UK? I can see the benefit to the European types over the sea, but I can't really see BA/Virgin/BMI wanting to fly London-Paris-New York.
I don't see the point in the UK Govt supporting yet another initiative to allow the rest of the EU to become more prosperous at our expense!
I don't see the point in the UK Govt supporting yet another initiative to allow the rest of the EU to become more prosperous at our expense!