Kinnock looks to Lisbon for support in ‘open skies’ deal

Date: 06/06/1996

By Tim Jones

TRANSPORT Commissioner Neil Kinnock heads for Portugal next week in a bid to tip the balance in favour of joint Union talks with the Americans on improving access to each other's airports.

Seventeen months after he began his campaign to win an agreement from member states to allow the Commission to negotiate an 'open skies' accord with the US, Kinnock hopes Portuguese support will at last win him the backing of a qualified majority of transport ministers.

In meetings at the Portuguese transport ministry on Monday (10 June), the Commissioner will seek to convince ministers that his proposals will take account of their concerns.

He will warn that the national airline TAP - which was saved from financial disaster by a huge subsidy in July 1994 following 20 years of losses - would be unable to cope if US airlines were suddenly given 'traffic rights' or unfettered access to Portuguese airports and profitable routes.

“They are very concerned about traffic rights and we want to assure them that we would build in transition phases to deal with this,” said a Commission spokeswoman. “But we also need to tell them that, without talking about traffic rights, we won't get anywhere with the Americans.”

Twelve member states have now accepted the details of a mandate for the Commission set out in a compromise proposal from the Italian presidency. The UK is considered a hopeless cause since it is regarded as being opposed to granting extra competence to the Commission for political reasons, but the other

two sceptics, France and Portugal, are considered to be more open to persuasion by the Commission.

Their fears over traffic rights have been addressed by dividing the draft mandate into a series of steps, although each step would not require the separate approval of transport ministers.

Under the Italian proposal, the first round of talks with the Americans would include 'soft rights' - such as setting common rules for the foreign ownership of airlines, anti-trust clearance, access to computer reservation systems and definitions of bankruptcy - while traffic rights would be put off until later.

It remains to be seen whether this would be acceptable to the Americans, since they are interested primarily in securing much greater access to European airports and feeding passengers from intra-European flights into trans-Atlantic traffic. From their exploratory talks at the US Department of Transportation in April, Commission officials believe this could work.

“If we went to see the Americans and they mentioned traffic rights, we would take note and report back to the Council,” said an official. “The idea is that once you start, there is a natural dynamic.”

If Kinnock manages to win over the French or the Portuguese at the next meeting of transport ministers on 17-18 June, he will decide whether to push it to a vote or wait until the September Council.

“This will have most impact if we take 15 member states with us,” said a Commission official. “We are most interested in doing that although there does come a point when - with the Americans already talking to the Spanish and the French - it is too late.”

When Kinnock began his struggle for a joint mandate, the US had already signed bilateral open skies deals with Austria, Belgium, Denmark, Luxembourg, Sweden and Finland.

Since then, Washington has penned an agreement with Germany, which was quickly followed by the granting of anti-trust immunity to the alliance between Lufthansa and United Airlines.

The refusal to allow a large increase in Air France's summer flights to US then bludgeoned the French transport ministry into agreeing to renegotiate a bilateral access agreement. Now, Air France is talking to an American carrier about a possible alliance which will increase the pressure to sign a deal in return for US anti-trust immunity.