Five-Month Delay Gives Heathrow Carriers Time To Shore Up
Thursday morning, transport ministers in the European Union
unanimously approved an Open Skies treaty agreement with the United
States, that throws open new competition for lucrative
trans-Atlantic airline routes.
The agreement came after British Transport Secretary Douglas
Alexander received approval on a five-month delay in implementing
the deal, to give British carriers at London's Heathrow Airport --
Virgin Atlantic and British Airways -- time to revise their game
plans in the face of potential competition from American
Ministers expect the plan to be fully implemented by March 2008,
according to The Guardian. As written, the agreement is valid for
two years; a second phase of the treaty will be voted on in 2010.
That plan includes one of the more contentious sticking points in
the Open Skies debate -- easing US regulations on foreign ownership
of domestic airlines.
Should all parties not agree to that second phase, the skies
would be "closed" once more.
"We all accept a mechanism that will suspend the benefits of the
agreement for US companies if we don't have a second stage by
2010," said EU Transport Commissioner Jacques Barrot, who also
noted "I am confident that the process will deliver greater freedom
for investors in aviation and even closer integration and an even
healthier industry in general."
British Airways -- whose planes now dominate the ramp at
Heathrow -- remained opposed to the deal,
with CEO Willie Walsh calling Open Skies "a poor agreement for
Britain and Europe."
Walsh also took issue with provisions in the plan that prevent
foreign-owned carriers from flying between US airports -- as no
such limitations exist for US carriers flying between airports in
"So far the US has made no meaningful concessions. American
carriers can now fly into Heathrow, Europe and beyond while their
own backyard remains a no-go area for EU carriers and foreign
ownership of their airlines remains unchanged," said Walsh. "We
will hold the government to its word to fight for Britain's
interests if America doesn't play ball."
The Air Transport Association, which represents most large US
carriers, voiced its support for the deal.
"This Open Skies agreement paves the way for much-desired
increased service between the United States and Europe. It has the
potential to provide enormous benefits to our respective customers
and economies," said ATA President James May.
US Secretary of Transportation Mary Peters also heralded the
agreement, that gives American carriers much greater access to
potentially lucrative European markets.
"The historic decision by the European Council of Ministers to
endorse an Open Skies agreement between the US and the EU will
bring new and valuable benefits to air travelers and communities on
both sides of the Atlantic," Peters said.