Open Skies
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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.
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.
Thread Starter
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It seems fine; the US has agreed to look at other areas and one can assume that the US will show bona fides in this regard.
The basic thing is that Open Skies is on the table, plus some extres to be discussed in future. Now, to play devil's advocate, what could be gained by NOT agreeing the deal? The EU is NOT going to get anything better than this, so if they screw this up, it's not going to move those issues "to be discussed at a later date" any closer to achievement; it'll just ruin any chances of either those issues or the main deal being done in the near future.
Fingers crossed that everything will go according to plan!
Good news for Ireland/Aer Lingus anyway. The one question I have is this: assuming the deal is approved by EU ministers on the 22nd, what then? How long a lead in will there be? Could a country decide to put it into being immediately, or (as I expect) will the EU say that the deal will take effect on a certain date; I sincerely hope they don't pick something stupid like November and miss the whole of the Summer season.
The basic thing is that Open Skies is on the table, plus some extres to be discussed in future. Now, to play devil's advocate, what could be gained by NOT agreeing the deal? The EU is NOT going to get anything better than this, so if they screw this up, it's not going to move those issues "to be discussed at a later date" any closer to achievement; it'll just ruin any chances of either those issues or the main deal being done in the near future.
Fingers crossed that everything will go according to plan!
Good news for Ireland/Aer Lingus anyway. The one question I have is this: assuming the deal is approved by EU ministers on the 22nd, what then? How long a lead in will there be? Could a country decide to put it into being immediately, or (as I expect) will the EU say that the deal will take effect on a certain date; I sincerely hope they don't pick something stupid like November and miss the whole of the Summer season.
Most of the news reports I've read have suggested the same time line
With regard to Aer Lingus/Ireland ... RTE's news at nine o clock said it signaled the end of the Shannon stopover.
http://www.businessweek.com/ap/finan.../D8NK771O0.htm
JAS
EU Transport Commissioner Jacques Barrot said he would ask EU nations to back the deal when EU transport ministers meet March 22. The U.S. Congress must also back the deal before the new rules would kick in Oct. 28.
http://www.businessweek.com/ap/finan.../D8NK771O0.htm
JAS
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Thread Starter
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A fly in the ointment
Looks like BA and VS will be pressing the UK govt to reject the deal.
http://news.independent.co.uk/busine...cle2323467.ece
Probably not unexpected, but still a major obstacle; since the voting will not be by qualified majority, the deal could still be undone. The UK could, even if it were the only opponent of the deal, veto it for everyone else, with the result that the whole O/S process could be finished for years - certainly to the end of the current US administration. Of course, BA/VS would be very happy with this, which suggests that, really, the best course of action would be for the US and UK to do a deal under the supervision of the EU. Otherwise, we could be back and forth to this position for years to come.
http://news.independent.co.uk/busine...cle2323467.ece
Probably not unexpected, but still a major obstacle; since the voting will not be by qualified majority, the deal could still be undone. The UK could, even if it were the only opponent of the deal, veto it for everyone else, with the result that the whole O/S process could be finished for years - certainly to the end of the current US administration. Of course, BA/VS would be very happy with this, which suggests that, really, the best course of action would be for the US and UK to do a deal under the supervision of the EU. Otherwise, we could be back and forth to this position for years to come.
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EZY/FR on Long Haul
I on the front page of the Times newsaper this morning that the Open skies agreement could see a plummet in air fares across the Atlantic wil LC airlines lurking.
I was thinking about EZY and FR. Being the two biggest LC carriers in Europe, and 2nd and 3rd biggest in the World (I think!
) surely they would want a slice of the action.
EZY
Easyjet would probably be the LC airline that would fly to major airports such as JFK and IAH, instead of the smaller airports which would attract FR.
I can see EZY using A332s on their routes, and maybe ordering A350s in the future. These would intergrate well with the fly-by wire a/c they already have in the A319s.
I think that they would seal off LPL and LTN for transatlantic flights, and maybe give NCL that link across the pond they always wanted.
FR
As I said above, FR will be attracted to the smaller airports with lower landing fees.
I can see FR using B763s on their routes, and maybe ordering the 787 in the future. These would also intergrate well into the FR fleet, with an all Boeing set up.
I think that DUB and STN would be FR's mainstays, but they could also venture out into EMA.
They may also be the first to offer 'Free' flights across the Atlantic. Afterall, you are on the plane longer, and the in-flight gambling they want to install may just make these fares possible!
All these ideas are just my opinion IF EZY and FR were to look at crossing the pond anytime soon.
This maybe the break many UK airports have been waiting for. MAN are still desperately trying to expand on the long haul (and are doing a good job), and NCL may get that link to NYC they have been longing for!
If this agreement does go through, sure this would make LHR by far the biggest airport in the world, not only on International passengers, but across the board. Chicago and Atlanta will have to watch out!
Anybody got any opinions?
I was thinking about EZY and FR. Being the two biggest LC carriers in Europe, and 2nd and 3rd biggest in the World (I think!
) surely they would want a slice of the action.EZY
Easyjet would probably be the LC airline that would fly to major airports such as JFK and IAH, instead of the smaller airports which would attract FR.
I can see EZY using A332s on their routes, and maybe ordering A350s in the future. These would intergrate well with the fly-by wire a/c they already have in the A319s.
I think that they would seal off LPL and LTN for transatlantic flights, and maybe give NCL that link across the pond they always wanted.
FR
As I said above, FR will be attracted to the smaller airports with lower landing fees.
I can see FR using B763s on their routes, and maybe ordering the 787 in the future. These would also intergrate well into the FR fleet, with an all Boeing set up.
I think that DUB and STN would be FR's mainstays, but they could also venture out into EMA.
They may also be the first to offer 'Free' flights across the Atlantic. Afterall, you are on the plane longer, and the in-flight gambling they want to install may just make these fares possible!
All these ideas are just my opinion IF EZY and FR were to look at crossing the pond anytime soon.
This maybe the break many UK airports have been waiting for. MAN are still desperately trying to expand on the long haul (and are doing a good job), and NCL may get that link to NYC they have been longing for!
If this agreement does go through, sure this would make LHR by far the biggest airport in the world, not only on International passengers, but across the board. Chicago and Atlanta will have to watch out!
Anybody got any opinions?
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I could see FR sticking with the 737-800's and stick to the East coast with poss first route as follows STN-PIK-EWR, Airberlin would also be an airline to watch at STN as they have a interline system set up and running. I could see them using, B767 or even B777 to the west coast of the USA.
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Heathrow is very slot constrained so probably not a lot of extra flights especially in morning as it is already so busy but I can see American and BA moving flights over from Gatwick.
I thought Manchester was not really affected by the Old Bermuda so not sure if it will have a vast effect
Places that could do quite well are Stansted and Luton in my opinion
Ian
I thought Manchester was not really affected by the Old Bermuda so not sure if it will have a vast effect
Places that could do quite well are Stansted and Luton in my opinion
Ian
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Heathrow is very slot constrained so probably not a lot of extra flights especially in morning as it is already so busy but I can see American and BA moving flights over from Gatwick.
I thought Manchester was not really affected by the Old Bermuda so not sure if it will have a vast effect
Places that could do quite well are Stansted and Luton in my opinion
I thought Manchester was not really affected by the Old Bermuda so not sure if it will have a vast effect
Places that could do quite well are Stansted and Luton in my opinion
Why would BA move flights to LGW? LHR is 'theirs.' No airline comes close to what they operate from that airport. If they sacrafice some of these slots, they are basically giving BMI the chance to move in. I suppose if they were to move the US flights to LGW and start new East Bound services, that could work.
Manchester is throwing itself into a massive expansion plan for 2015. They want new services on long haul routes. This could help them, as the LC airlines may get involved.
I definatley think that LTN would grown rapidly, but STN just doesn't have the space at the moment. They are nearing their maximum capacity of 25 million pax per annum. I think that the airports to watch are LPL, NCL and EMA. Big with the LC carriers, and could be the bases for the next revolution in air travel.
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Aberdeen has long coveted a link to Houston, KLM were speaking about linking the two, subject to an agreement on "open skies". Oh, & a longer runway at ABZ! 
Also BAA were in talks with "a-still-unnamed" US airline about the same link.
Also BAA were in talks with "a-still-unnamed" US airline about the same link.
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Assuming the agreement gets past the EU Council (v. likely) and the US Congress (...), the most likely opportunities would seem to be:
Continental, Delta etc could access Heathrow - but they would have a hell of a job amassing enough slots to make it viable.
BMI could fly to the US from LHR.
Virgin might find it easier going running a franchise operation in the US.
BA and American could gain anti-trust immunity to allow them to cooperate more closely
Lufthansa could operate transatlantics from 'their' Zurich hub.
Several opportunities would open up for Aer Lingus
Hopefully European airlines will all make a bit of money, but probably not much, carrying US government business which up to now has been closed to them.
Talk of locos between the UK and the US is nonsense, there would never have been any obstacle in the first place. The current UK/US bilateral is flexible enough, and the two sides liberal enough, to allow just about anything as long as it doesn't involve Heathrow, and to a lesser extent Gatwick.
Continental, Delta etc could access Heathrow - but they would have a hell of a job amassing enough slots to make it viable.
BMI could fly to the US from LHR.
Virgin might find it easier going running a franchise operation in the US.
BA and American could gain anti-trust immunity to allow them to cooperate more closely
Lufthansa could operate transatlantics from 'their' Zurich hub.
Several opportunities would open up for Aer Lingus
Hopefully European airlines will all make a bit of money, but probably not much, carrying US government business which up to now has been closed to them.
Talk of locos between the UK and the US is nonsense, there would never have been any obstacle in the first place. The current UK/US bilateral is flexible enough, and the two sides liberal enough, to allow just about anything as long as it doesn't involve Heathrow, and to a lesser extent Gatwick.
Will be interesting to see how BA and Virgin will cope with the loss of their lucrative LHR to US oligopoly.
On the whole, I think it could be advantageous to Virgin, BA, Midland... as they should be able to fly from anywhere in the UK to the USA rather than being restricted to certain airport pairings. At the moment BA can't fly direct to IAH from LHR or ORD from LGW, etc. They could also take advantage of other European airports that are not at capacity.
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Unfortunately, I wouldn't be so sure about approval by the European Transport Council; the UK Govt will be under severe pressure to veto it (see article in today's Independent); BA and VS want it like they want a hole in the head and they will be lobbying furiously to veto it. Unfortunately, they can do just that, because qualified majority voting does not apply.
The information I've been given is that since no change in US law is brought about by this, Congressional approval is not required. However, this could be a moot point.
It seems ridiculous that with 26 countries wanting a deal and one not wanting it, that one country could wreck it for everyone. The Americans may well have to threaten Britain with a revocation of Bermuda II, to put some pressure on.
If the UK does wreck it, then what next? Clearly if every other country wants the deal, why can't they go ahead. Why should BA have a veto over EI's ability to expand its t/a links? Surely, the best option would be for the US and UK to thrash out their differences, under EU supervision and everyone else should just go ahead with the deal as agreed.
The information I've been given is that since no change in US law is brought about by this, Congressional approval is not required. However, this could be a moot point.
It seems ridiculous that with 26 countries wanting a deal and one not wanting it, that one country could wreck it for everyone. The Americans may well have to threaten Britain with a revocation of Bermuda II, to put some pressure on.
If the UK does wreck it, then what next? Clearly if every other country wants the deal, why can't they go ahead. Why should BA have a veto over EI's ability to expand its t/a links? Surely, the best option would be for the US and UK to thrash out their differences, under EU supervision and everyone else should just go ahead with the deal as agreed.
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I on the front page of the Times newsaper this morning that the Open skies agreement could see a plummet in air fares across the Atlantic wil LC airlines lurking.
I was thinking about EZY and FR. Being the two biggest LC carriers in Europe, and 2nd and 3rd biggest in the World (I think! ) surely they would want a slice of the action.
I was thinking about EZY and FR. Being the two biggest LC carriers in Europe, and 2nd and 3rd biggest in the World (I think!
) surely they would want a slice of the action.
To follow your idea, I have found a suitable Zero star hotel at New York for Ryanair B787 Crews (for their low cost nightstop)
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At the same time, restrictions on U.S. airlines flying to Europe would be loosened, effectively removing barriers that now grant only two U.S. airlines — American and Delta — the right to fly into London Heathrow Airport.
I thought it was United, at least it was when I last checked...
Anywhere in the UK to JFK would be a bit too long for an FR 738. STN's 3,400 mi, PIK's 3,200. The 738 reaches to just under 3,600 with 186 passangers.
Even moving outside the UK & closer to the US, SNN is still a gnats over 3,000 mi. Shortest single jump would be from NOC again just over 3,000.
JAS
Even moving outside the UK & closer to the US, SNN is still a gnats over 3,000 mi. Shortest single jump would be from NOC again just over 3,000.
JAS
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For the Loco's it's just not going to happen.
Loco's don't like sector lengths of greater than 4 hours, the more sectors per day the more money they generate. The margin on economy trade across the atlantic are already wafer thin.
Really would you want to go on a 737/A319 7 hours without entertainment or food?
Go to a bucket operator and you can fly with BA/VS/CO etc for £250 with food and entertainment. If this deal goes through then prices across the pond will plummet and you'll still be flying with the aforementioned carriers and more.
If EZY goes across the pond I'd leave the company.
IT AIN'T GOING TO HAPPEN!
Loco's don't like sector lengths of greater than 4 hours, the more sectors per day the more money they generate. The margin on economy trade across the atlantic are already wafer thin.
Really would you want to go on a 737/A319 7 hours without entertainment or food?
Go to a bucket operator and you can fly with BA/VS/CO etc for £250 with food and entertainment. If this deal goes through then prices across the pond will plummet and you'll still be flying with the aforementioned carriers and more.
If EZY goes across the pond I'd leave the company.
IT AIN'T GOING TO HAPPEN!