Brussels, 22/03/2007 (Agence Europe) - Meeting in Council on Thursday, EU transport ministers reached the consensus required for approval of the draft “Open Skies” agreement that will mark the first stage in liberalisation of the transatlantic air carrier market. At the request of the United Kingdom, supported by Italy, the agreement comes with two conditions. First of all, it postpones entry into force of the agreement until 30 March 2008 (date when refurbishment of Heathrow Airport is due as is the opening of a fifth terminal that will allow additional airline slots to be opened), instead of 28 October. Furthermore, in case the agreement on the second stage of liberalisation is not concluded within twelve months from entry into force of the agreement, it provides for certain elements of the agreement to be brought into question by member states subject to unanimous approval from the EU27.
Thursday's consensus confirms the grounds for the Commission and member states' “flexible approach”, a spokesman for the European Commission comments. We recall that the draft agreement sealed on 2 March had required 13 negotiation sessions (see EUROPE 9322 and EUROPE 9379). It was not certain, however, until the work of the Council opened, that the United Kingdom, the only member state openly opposed to the project, would be willing to accept the agreement, described by the British secretary of state for transport, Douglas Alexander, as falling short of expectations and not creating “equal” access to the US air market. Doubts concerning the correct unfolding of the ministerial meeting lasted until the end, even after a “number of concessions” were made, according to some diplomatic sources. London, which holds 40% of total international air traffic, was ready to accept the agreement. These concessions were acquired with the support of Italy which, without challenging the text of the agreement, “associated itself” with the United Kingdom, in reaction to the information that appeared in yesterday's press reporting that Rome intended to place its veto on the agreement. Logically, the extended opening of the transatlantic air carrier market could expose its operator, Alitalia, to greater competition, pending privatisation. As foreseen, London therefore remained relatively isolated in its opposition to the project although some Scandinavian states (Sweden and Denmark) would have found it preferable to include a clause in the agreement providing for civil aviation to be included in the CO2 emissions trading system. Referring to this idea the day before the Council, the vice-president of the Commission in charge of transport, Jacques Barrot, had stressed that the position of the Commission was unchanged and that this kind of question “should be discussed within the ICAO” (International Civil Aviation Organisation). Although the Open Skies agreement could be to the disadvantage of the member states that had already concluded bilateral agreements of this kind with the United States (which was considered contrary to UE law by a Court of Justice decision 2002), these states were generally in favour of the text as a whole. France said it was “sufficiently balanced”. Spain spoke of the advantages with regard to legal security to be afforded by the agreement, while Ireland, whose Aer Lingus company intends to open three new routes to the United States, described it as a good agreement.
The Council nonetheless repeated that its final objective was an “open and fully liberalised air space” covering the Union and the United States. It stressed the importance of reaching the second stage of the agreement, that will allow cabotage to be included (the possibility of operating flights between two towns in the same State), as member states would like but which has so far been prohibited by US legislation. Foreseen for 2010 at the latest, it will allow “the fruits of liberalisation to be pursued on both sides of the Atlantic”. It calls on the Commission to begin talks with the US government “as soon as possible”. Washington would be ready to accept the agreement despite the decision to postpone its entry into force until March. The US Secretary of State for Transport, Marry Peeters, welcomed the Council's decision saying that the “agreement will be beneficial for both parties”.
The agreement as adopted on Thursday allows extension to all European companies (of the 11 member states that had not concluded an Open Skies agreement - the three Baltic States, Cyprus, Ireland, Greece, United Kingdom, Bulgaria, Hungary and Spain) the freedom to operate flights from any European town to any point of the United States, and also to operate flights (for passenger and freight) beyond the United States to third countries belonging to the common aviation space without departure having to be from one of the member states (5thand 7th freedoms). Also, the agreement provides for the possibility for European companies to acquire over 50% of the capital of US companies and up to 25% of the shares with voting rights. Europe also maintains the possibility
of limiting US investment in European companies (currently limited to 49.9%) to 25% (EUROPE 9385). Following introduction of the amendments to the text of the agreement, which will be done during one of the next COREPER meetings, it will be signed during the EU/US summit on 30 April.
Speaking on behalf of the presidency, the German federal minister of transport and urban planning, Wolgang Tefense, listed the benefits of the agreement, notably for investment. He was delighted with the possibility of completing, “a fully liberalised trans-Atlantic market” in the next stage to come.
Welcoming adoption of the agreement, Commissioner Barrot was delighted to be able to, “pilot this agreement towards its destination with all passengers on board…It's a good agreement. A good agreement for passengers and airlines”. He also declared that he remained committed to further liberalisation. (aby)