Open skies talks grounded by US election

Date: 24/10/1996

By Tim Jones

LONG-awaited EU-US 'open skies' negotiations are the latest victim of the American presidential election hiatus.

With just a week to go before the first round of talks over the creation of a common transatlantic aviation area, the Clinton Administration has still to appoint a negotiating team.

Claude Chêne, the European Commission's director of air transport policy, will head an EU delegation including at least nine experts from the member states which will visit Washington on 30-31 October.

With the talks coming only five days before the presidential election, Union officials are finding it hard to drum up enthusiasm from their American counterparts. It is particularly difficult since US Transportation Secretary Federico Peña is expected to be replaced once the polls are over.

This is not the only reason for Washington's coolness towards the Europeans' open skies proposals. US officials do not like the two-pronged nature of Transport Commissioner Neil Kinnock's mandate, which only allows him to negotiate traffic rights - access for EU and US airlines to each other's markets - after first discussing what they consider to be secondary issues.

Chêne's team will go to Washington to begin talks on norms and rules for equipment leasing, access to computer reservation systems, code-sharing, slot allocation, common rules on state aids and bankruptcy legislation, and foreign ownership thresholds.

He has no mandate to negotiate traffic rights, an approach that has already been condemned as potentially fruitless by Charles Hunnicutt, US assistant secretary for aviation.

“The Americans are not so keen,” admitted a senior Commission official. “They are much more interested in traffic rights than any of these other issues, which we can understand.”

When Chêne held exploratory talks with the state and transportation departments in April, they made it clear then that winning greater access to European airports was the key issue. “US representatives feel that this first round should be more of a discussion than a negotiation. They said they would listen, but that is all. It is inevitable that they should take a tough approach. Before two sides start talking, one will always say that what is on offer is not enough,” said another senior official.

The Commission is hopeful that the Americans' frustrating experience in bilateral talks with the UK government over improved access for their airlines to London's Heathrow Airport will have taught them a lesson. Even though the US has been able to reach open skies deals with seven Union member states, the UK prize remains elusive.

“While traffic rights are an important piece of the game, they are not everything and I think the Americans know that,” said an official. “Even if you cover Europe with all sorts of open skies agreements, there are still many loopholes. As they are discovering now, traffic rights are nothing without slots.”

US airlines - American, United and Delta - are desperate to win extra take-off and landing slots at Heathrow. Yet, while a reluctant UK government can swap traffic rights for improved access for British Airways in the US, it cannot allocate the slots.

Washington is convinced that with more than 80 airlines operating out of Heathrow, some would be happy to sell their slots to US airlines and move operations to the secondary London airports at Gatwick and Stansted.

EU negotiators are hopeful that they can convince their opposite numbers at least to talk about harmonisation of competition policy for civil aviation.

Both the Commission and the US government have expressed concerns over many of the 'soft' issues earmarked for discussion at the end of October. In July, the Commission opened a ground-breaking investigation into six alliances between US and European airlines for possible anti-competitive effects on the internal market.

Despite their relentless optimism, Commission officials do not expect serious talks to get under way until Peña's successor is named. When asked what he expected to get out of this first meeting, one official quipped: “The date of the second meeting.”