US piles pressure on EU to gain ‘open skies’ deal

Date: 28/03/1996

By Tim Jones

THE US administration is turning up the heat in its campaign to win 'open skies' access for its airlines into the European Union.

When Washington turned its heavy air liberalisation guns on Air France this week, nobody at the European Commission was surprised.

Having recently secured a promise from Germany of an 'open skies' agreement - which recognises by treaty the right of airlines to offer extra capacity without prior authorisation - the US was expected to turn its fire on the French, Italian or Spanish markets.

This it did by refusing a request from Air France to add 500 flights from Paris to New York, Los Angeles, Houston and Washington to its schedule for the peak summer season.

Seizing the moment, Transport Commissioner Neil Kinnock will head for Washington on 26 April to meet the architect of the Americans' aggressive market-opening strategy, Transportation Secretary Federico Peña.

Last year alone, the US signed 22 new aviation bilateral agreements, including nine 'open skies' agreements in Europe which culminated in the deal with Germany in February.

Kinnock wants to gauge from the Americans what they intend to do next, and report back to Union transport ministers on the sort of concessions the US would like to see in a pan-EU/US 'open skies' deal.

Concerned that the American approach of picking off member states one-by-one is leading to lopsided access for US airlines to the EU market, Kinnock has been pressing over the last year for a joint negotiating approach led by the Commission. This, he believes, would avoid US carriers extending the rights they already have to pick up passengers in one member state and disembark in another. A proliferation of bilateral deals could allow them to control a network of EU routes and feed passengers from Union destinations into long-haul services, an area of business they already dominate.

Kinnock will present his plan to negotiate an overall EU-US deal - covering issues ranging from computer reservation systems to code sharing, slot allocation, state aid rules, bankruptcy legislation and foreign ownership thresholds - to Peña at next month's meeting.

He will do so in the knowledge that this week's spat between the US and France was merely a softening-up exercise. In return for restoring the 500 flights to Air France, the US won French agreement to strike a new bilateral deal, something Paris is keen to emphasise will not be an 'open skies' agreement.

Kinnock and his team are convinced that the tide is turning in their favour, even among those member states which had previously been adamantly opposed to a joint approach towards taking on the Americans.

“The French case just reinforces what we have been saying all along, that a single member state cannot cope with that kind of pressure on its own,” said a Commission official. “We could reach a balanced agreement if we meet might with might.”