Domestic Carriers Fighting Virgin Offshoot
Once again, a proposed
"open skies" aviation pact between the US and the European Union
was dealt a blow this week... when US officials warned that planned
changes to airline ownership and control rules would not be ready
in time for a crucial EU meeting set for October.
Acting US Transportation Secretary Mario Cino says intense
political opposition to the idea of allowing greater foreign
ownership in US airlines prevented an agreement to the new
As Aero-News reported, a
tentative agreement was reached between the two sides on the Open
Skies treaty last November. That deal hinged, however, on a change
in the ownership rules... and its acceptability to the EU.
And since that hasn't happened, the treaty, for the moment, is
stillborn -- and according to an undersecretary at the DOT... there
is "no specific timetable" at the moment to get it going again.
Just Ask Virgin America
If you need proof of how heated the issue of foreign ownership
of airlines is, just ask Virgin America. For an airline that has
yet to fly its first flight -- or even receive its operating
license -- the upstart carrier is already riling up the domestic
air travel industry.
Why? Well, as you may recall... several other carriers, most
notably Continental, have been lobbying for months to keep the
airline on the ground, and not competing with established carriers.
Those airlines say the issue has to do with the question of foreign
ownership -- as British-based Virgin Group owns 25 percent of the
subsidiary, right at the limit under current US regulations.
But could it be instead... that airlines simply don't want
another low-cost carrier sapping business, at a time when many of
them are just now beginning to see black ink on their profit/loss
Some analysts contrast Virgin America's travails with the
relatively simple approval process LCC JetBlue went through, six
years ago. Of course, JetBlue is home-owned... and it began
operations just before 9/11 put the airlines into a state of
recession that still lingers.
The last thing those airlines want to see is another carrier
taking a slice of the pie, which may just be the true issue here...
regardless of who, ultimately, owns what.