Could EU airlines soon be flocking to airports in US?

By Simon Taylor

Date: 15/06/06

With world trade talks stalled and differences over foreign policy, EU-US relations seem short of good news at the moment. But, according to the State Department's top transport official, aviation could be one of those rare areas of positive progress.

US Deputy Assistant Secretary of State for Transportation Affairs John Byerly said that the US had just removed one of the final obstacles lying in the way of making "aviation history" by creating a liberalised EU-US market.

The US Congress agreed last week (6 June) to grant the Department of Transportation (DoT) the power to draw up new rules for the aviation sector. In theory, this could open the door to EU governments approving the deal they negotiated last November on an EU-US 'open skies' agreement.

The EU's approval depends on whether the DoT's proposal would improve sufficiently the control that foreign investors would have over commercial decisions by US carriers in which they had invested. These include issues such as buying aircraft or choosing advertising agencies or other business service suppliers, although the US will maintain its 25% limit on foreign ownership of US airlines.

Byerly said he was hopeful that what the DoT would propose would be "recognised by the Europeans". He stressed that the changes were not "focused on meeting the EU's requirements" but instead on the US' need to "modernise and adjust our own approach" to foreign involvement in US carriers. The DoT proposals would offer foreign investors an "opportunity to better protect their investment... without tripping the wire that turns their investment activity into unlawful control of US carriers".

Byerly said he was optimistic that the DoT's proposal would be sufficient to address the concerns of EU governments. "Over the past few weeks or months [DoT's] intention has been to reach a result that is meaningful, robust and clear - those are the words the EU has used. It doesn't make sense to think they would be aiming at anything less than that," he said.

Byerly, who is the US chief negotiator on bilateral transport agreements, said he hoped that the new rules would get a positive response from EU transport ministers when they meet on 12 October.

While the decision to accept the proposals and approve the deal negotiated last November would be "tough", he warned of the consequences of not reaching an agreement. "If Europe and the US miss this connection to a single liberalised EU-US aviation market we could find ourselves waiting a long, long time for the next departure," he said. A deal would represent an "enormously valuable liberalisation of transatlantic market" bringing benefits such as allowing "for the first time in history for every European carrier to fly from every point in Europe to every point in the US," he added.

On another difficult area for EU-US relations in aviation, the recent European Court of Justice ruling that the EU was not legally justified in handing over air passenger information to the US authorities, Byerly said he was confident that a solution could be found. US officials were "ready to engage" with Commission officials to find a solution, he said. But he stressed the need for a solution which maintained the current levels of security. "We want the flights to continue to flow and as a pre-requisite we need the security information which is essential for aviation security in both directions," he said.

Interview with US Deputy Assistant Secretary of State for Transportation Affairs John Byerly. Byerly said that the US had just removed one of the final obstacles lying in the way of making 'aviation history' by creating a liberalised EU-US market.

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