UK says to propose limited "open skies" deal to US
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UK says to propose limited "open skies" deal to US
Wednesday July 31, 2:04 pm Eastern Time
Reuters Company News
UK says to propose limited "open skies" deal to US
By Mark Potter
(Adds U.S. Transportation Department comment in paragraphs 6-7)
LONDON, July 31 (Reuters) - Britain will propose a limited deal with the United States next month to open up their airline market to greater competition, a UK government official said on Wednesday.
The two countries have been haggling for years over a so-called "open skies" deal to lift restrictions on the number of airlines that can fly between London's Heathrow, the world's busiest international airport, and the United States.
"We would like to see a full liberalisation of the UK-U.S. market, but so far we have not been able to persuade the U.S. to open up its own market," said James Thomson, a spokesman for Britain's Department for Transport.
"So we are proposing a more limited deal which will introduce more competition while preserving leverage to obtain more liberalisation at a later date," he told Reuters.
Thomson declined to say what a limited deal might entail.
A spokesman for the U.S. Transportation Department confirmed the two governments had scheduled talks for August 15. He said the U.S. position on open skies had not changed.
"We do not have any details of the proposal at this point," the department's spokesman said. "We hope it's something that moves the process forward."
Two carriers from each country can currently operate the lucrative Heathrow-U.S. routes and media speculation has centred on the possibility of adding a few more.
Under the present deal British Airways (London:BAY.L - News) and Virgin Atlantic from Britain and U.S.-based American Airlines (NYSE:AMR - News) and United Airlines (NYSE:UAL - News) enjoy exclusive rights to operate direct services between Heathrow and the United States.
Operators such as British Midland , the UK's second-biggest airline, and U.S. package carrier FedEx (NYSE:FDX - News) have been lobbying both governments to let other firms fly the routes.
MIXED REACTION
Britain's leading airlines gave a mixed response to the government initiative, after talks between them earlier in the day.
British Midland, most likely to benefit if more carriers are allowed to fly the routes in question, was positive.
"All airlines that are able to provide transatlantic services from Heathrow ought to be able to do so," a spokesman said. "But an incremental deal, and one that would hold out the prospect of further progress, is better than no deal."
Virgin Atlantic, run by colourful entrepreneur Richard Branson, was less enthusiastic.
"If we give U.S. airlines access to Heathrow, which is all they're really interested in, in exchange for limited access to the U.S., we've lost our only bargaining position," a spokeswoman told Reuters.
British Airways also called for full liberalisation.
"We would like to see talks on full liberalisation between the European Union and the United States, with the UK playing its part," a spokeswoman said. (Additional reporting by Peter Kaplan in Washington)
Reuters Company News
UK says to propose limited "open skies" deal to US
By Mark Potter
(Adds U.S. Transportation Department comment in paragraphs 6-7)
LONDON, July 31 (Reuters) - Britain will propose a limited deal with the United States next month to open up their airline market to greater competition, a UK government official said on Wednesday.
The two countries have been haggling for years over a so-called "open skies" deal to lift restrictions on the number of airlines that can fly between London's Heathrow, the world's busiest international airport, and the United States.
"We would like to see a full liberalisation of the UK-U.S. market, but so far we have not been able to persuade the U.S. to open up its own market," said James Thomson, a spokesman for Britain's Department for Transport.
"So we are proposing a more limited deal which will introduce more competition while preserving leverage to obtain more liberalisation at a later date," he told Reuters.
Thomson declined to say what a limited deal might entail.
A spokesman for the U.S. Transportation Department confirmed the two governments had scheduled talks for August 15. He said the U.S. position on open skies had not changed.
"We do not have any details of the proposal at this point," the department's spokesman said. "We hope it's something that moves the process forward."
Two carriers from each country can currently operate the lucrative Heathrow-U.S. routes and media speculation has centred on the possibility of adding a few more.
Under the present deal British Airways (London:BAY.L - News) and Virgin Atlantic from Britain and U.S.-based American Airlines (NYSE:AMR - News) and United Airlines (NYSE:UAL - News) enjoy exclusive rights to operate direct services between Heathrow and the United States.
Operators such as British Midland , the UK's second-biggest airline, and U.S. package carrier FedEx (NYSE:FDX - News) have been lobbying both governments to let other firms fly the routes.
MIXED REACTION
Britain's leading airlines gave a mixed response to the government initiative, after talks between them earlier in the day.
British Midland, most likely to benefit if more carriers are allowed to fly the routes in question, was positive.
"All airlines that are able to provide transatlantic services from Heathrow ought to be able to do so," a spokesman said. "But an incremental deal, and one that would hold out the prospect of further progress, is better than no deal."
Virgin Atlantic, run by colourful entrepreneur Richard Branson, was less enthusiastic.
"If we give U.S. airlines access to Heathrow, which is all they're really interested in, in exchange for limited access to the U.S., we've lost our only bargaining position," a spokeswoman told Reuters.
British Airways also called for full liberalisation.
"We would like to see talks on full liberalisation between the European Union and the United States, with the UK playing its part," a spokeswoman said. (Additional reporting by Peter Kaplan in Washington)
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I know that B.A. and V.S. are terrified of B.M.I. flying their long haul out of LHR, I'm sure that many regulars would soon be changing over very quickly to get the far supperior service than any other transatlantic carrier! definate competition for the big boys. about time too! 
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Another UK Government sell-out?
Am I the only person here that smells a rat?
Sure, let BMI compete with the other carriers, but if the US are not prepared to open up their markets, then why the hell should they get an open door to ours? The USA operates one of the biggest protectionist markets (outside of Japan) in existence, then cries "foul" when others treat them with the same attitude....SOD em!
People in glass houses.......
Sure, let BMI compete with the other carriers, but if the US are not prepared to open up their markets, then why the hell should they get an open door to ours? The USA operates one of the biggest protectionist markets (outside of Japan) in existence, then cries "foul" when others treat them with the same attitude....SOD em!
People in glass houses.......
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Kilted raises a good point. The US rarely make a deal that provides a level playing field, let alone one where they might be disadvantaged. Yes it could be an advantage for bmibaby, but you can bet that the US carriers will receive a greater advantage.
Another thought, where will they get all the slots from if LHR isn't upgraded? Maybe, they can go into Stansted if that is the lucky on to be upgraded. Thus, the US carriers will get in via the "back door"? Alternatively, allow the US all the access to LHR they want while upgrading STN, making it the UK's primary airport. While they're at it, they can charge the US carriers an arm and leg.
Food for though.
Another thought, where will they get all the slots from if LHR isn't upgraded? Maybe, they can go into Stansted if that is the lucky on to be upgraded. Thus, the US carriers will get in via the "back door"? Alternatively, allow the US all the access to LHR they want while upgrading STN, making it the UK's primary airport. While they're at it, they can charge the US carriers an arm and leg.
Food for though.
Last edited by Low-Pass; 2nd Aug 2002 at 14:04.
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The USA wanted almost half of all of BAs slots at LHR as the cost of approving anti-trust for BA/AA. Those slots would go exclusively to Amercian carriers. The Amercian position has not changed. They are not interested in 'Open Skies', they are interested in LHR. It is a foolish and dangerous game to gamble the interests of the the two major British long haul carriers in favour of the minnow of BMI with its fleet of just four A330s. UK PLC stands to be a major loser with this deal. I sense a Gibraltar-esque sell out on the cards from Phoney Tony.
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Yawn...... Not again.
The Spetics need to understand they cannot push us about, or dictate terms to us. Once the learn this, in about, oh I dunno, 20,000 years, we might get an agreement, otherwise, why bother.
Unless of course we elect a prime Minister who brown noses the US at every opportunity... err. oops, Open skies by tomorrow then?!?!
The Spetics need to understand they cannot push us about, or dictate terms to us. Once the learn this, in about, oh I dunno, 20,000 years, we might get an agreement, otherwise, why bother.
Unless of course we elect a prime Minister who brown noses the US at every opportunity... err. oops, Open skies by tomorrow then?!?!
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Hand Solo
I see your point but the size of an airline should have no impact at all on fair competition. However I agree that the UK government have to tread very carefully when opening up LHR to the US carriers.
ES
I see your point but the size of an airline should have no impact at all on fair competition. However I agree that the UK government have to tread very carefully when opening up LHR to the US carriers.
ES
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Electric,
The size of bmi is relvant. Do you think that it could cope with all of the extra compatition from much larger US airlines which are at the moment requesting financial help from their goverment to the tune of well over US1$billion.
Have "Open Skies" for sure, but as mentioned above, the US does hae a history of pressuring foreign governments to do things the US's way.
For instance, take a look at the the US government's response to China Airlines (CAL) proposition to buy A330's (by coincidence) instead of B-777's at the moment. Guess what, suddenly the US's funding of Taiwan's military is in question. In other words, "Buy our products or we won't give you money to defend yourself against the People's Republic of China".
It's called bullying and it comes under the cloak of being called "fair play". I think not.
The size of bmi is relvant. Do you think that it could cope with all of the extra compatition from much larger US airlines which are at the moment requesting financial help from their goverment to the tune of well over US1$billion.
Have "Open Skies" for sure, but as mentioned above, the US does hae a history of pressuring foreign governments to do things the US's way.
For instance, take a look at the the US government's response to China Airlines (CAL) proposition to buy A330's (by coincidence) instead of B-777's at the moment. Guess what, suddenly the US's funding of Taiwan's military is in question. In other words, "Buy our products or we won't give you money to defend yourself against the People's Republic of China".
It's called bullying and it comes under the cloak of being called "fair play". I think not.
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This doesn't sound like building a level playing field -more like our Tony's usual grovelling obedience to whatever George dubya tells him.
The US aviation industry is highly protected. I don't necessarily have a problem with that fact -but lets not pretend that a level playing field exists. These slots are is our only real bargaining chip. How does handing them over help get a fair deal?
This is bad news for UK airlines and consumers.
p.s. what's a spetic?
The US aviation industry is highly protected. I don't necessarily have a problem with that fact -but lets not pretend that a level playing field exists. These slots are is our only real bargaining chip. How does handing them over help get a fair deal?
This is bad news for UK airlines and consumers.
p.s. what's a spetic?
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Low Pass
bmi has 3 A330's with several more on order and is in a position to start transatlantic services almost immediately from LHR. Sure they are no match for BA or Virgin in terms of capacity but when you question "can they provide suitable competition" consider the following:
1) bmi are the second largest operator at LHR which can offer connections to an established European network
2) As well as having membership to the Star Alliance, bmi are codesharers with United which offers excellent connections stateside
I understand what you are saying and I share your view that the UK government must protect it's own back garden with great care but I fail to see that any airline with a desire to commence US services from LHR will ever be in a better position than bmi are now.
ES
bmi has 3 A330's with several more on order and is in a position to start transatlantic services almost immediately from LHR. Sure they are no match for BA or Virgin in terms of capacity but when you question "can they provide suitable competition" consider the following:
1) bmi are the second largest operator at LHR which can offer connections to an established European network
2) As well as having membership to the Star Alliance, bmi are codesharers with United which offers excellent connections stateside
I understand what you are saying and I share your view that the UK government must protect it's own back garden with great care but I fail to see that any airline with a desire to commence US services from LHR will ever be in a better position than bmi are now.
ES
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For instance, take a look at the the US government's response to China Airlines (CAL) proposition to buy A330's (by coincidence) instead of B-777's at the moment. Guess what, suddenly the US's funding of Taiwan's military is in question. In other words, "Buy our products or we won't give you money to defend yourself against the People's Republic of China".
Seems to me that the European's ought to start funding Taiwan's defense. Now that'd be "fair play."
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Electric
I think we're almost on the same wavelength here. I would love to see BMI with access to the US market. I just don't want to see a free for all as UK airlines don't receive the same government backing as their US counterparts. So, do an even swap with flight for flight. Give the US carriers 10 extra flights to LHR per week for 10 extra flights into JFK, Newark and Boston for UK based airlines. That way, everyone's happy? We'll see.
My other question is still unanswered. Where will all these extra slots come from? Somehow, I don't think BA will be keen to donate any more of theirs.
Roadtrip
Thanks for the kind offer, but most European nations are gradually moving away from their former imperialistic intentions under the guise of "doing what's best for the locals", so we'll leave that to the US. I figure it will still take a few years before it comes back to bite them in the ar$e.
Cheers, LP
I think we're almost on the same wavelength here. I would love to see BMI with access to the US market. I just don't want to see a free for all as UK airlines don't receive the same government backing as their US counterparts. So, do an even swap with flight for flight. Give the US carriers 10 extra flights to LHR per week for 10 extra flights into JFK, Newark and Boston for UK based airlines. That way, everyone's happy? We'll see.
My other question is still unanswered. Where will all these extra slots come from? Somehow, I don't think BA will be keen to donate any more of theirs.
Roadtrip
Thanks for the kind offer, but most European nations are gradually moving away from their former imperialistic intentions under the guise of "doing what's best for the locals", so we'll leave that to the US. I figure it will still take a few years before it comes back to bite them in the ar$e.
Cheers, LP
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ES & LP ........
I think you may be either overoptimistic or behind the times re : bmi.
From what I hear the company may well be on its last legs, or at least struggling to survive thro' next winter.
Hope reports of mass upheaval at 'Don Hall' untrue, or more redundancies I fear.
All this is unsubstantiated of course, just the usual rumour mill, I don't work for Midland.
I think you may be either overoptimistic or behind the times re : bmi.
From what I hear the company may well be on its last legs, or at least struggling to survive thro' next winter.
Hope reports of mass upheaval at 'Don Hall' untrue, or more redundancies I fear.
All this is unsubstantiated of course, just the usual rumour mill, I don't work for Midland.
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Low Pass
Spot on .... and I haven't a clue where the slots are coming from!!! Giving equal amounts of frequencies is the only way to be fair.
King
Don't believe everything you hear .... "Last Legs" is a little strong. baby is booming and bmi ex LHR and MAN-USA is also picking up again. As far as I see and I admit it is purely my opinion, bmi will never go bankrupt but will be sold off if things get desperate. Why ..... simple - LHR slots.
ES 100 POSTS
Spot on .... and I haven't a clue where the slots are coming from!!! Giving equal amounts of frequencies is the only way to be fair.
King
Don't believe everything you hear .... "Last Legs" is a little strong. baby is booming and bmi ex LHR and MAN-USA is also picking up again. As far as I see and I admit it is purely my opinion, bmi will never go bankrupt but will be sold off if things get desperate. Why ..... simple - LHR slots.
ES
100 POSTS
I hope reports of mass upheaval at Don Hall ARE true. The London end of the company has been saddled with their parochial, "Derby Airways" attitude for too long. Get rid of all of them and employ decent management in London.
