Open skies deal set for further delay

By Karen Carstens

Date: 10/06/04

LOYOLA de Palacio is set to clash with member states over transatlantic 'open skies' proposals, scuppering hopes in Washington of a preliminary deal to parade at the EU-US summit in Ireland on 25-26 June.

EU transport ministers are due to discuss a potential 'open skies' agreement tomorrow (11 June). In this "exchange of views" with de Palacio, the transport and energy commissioner, they will be asked to give guidance to the European Commission on "an early first-step agreement".

Industry insiders predict the verdict will be the same as the one given when ministers were asked their opinion last March - back to the drawing board.

The European aviation sector, meanwhile, remains concerned that what is on offer falls short of the open aviation area Brussels was mandated to negotiate on behalf of all EU member states.

In a 7 June letter to de Palacio, airport, airline and cargo associations jointly argue that "the deal as currently on the table does nothing to redress the imbalance of opportunities available to EU and US airlines and would actually further distort the competitive position in favour of US carriers". They would prefer to put talks on hold until after November's US election.

So far, the US has offered only a limited, one-sided deal that would give European airlines the right to develop franchised flights in the US, but only if they are controlled and operated by US carriers. In return it wants access to London's Heathrow airport, EU's main gateway.

Europe's aviation industry argues that accepting the current US offer would be an error and believes that, while there is a case for wider Heathrow access, conceding it now would give away the EU's trump card.

"Our concern is that once those rights are given away, we'd lose our leverage," one industry insider said.

De Palacio's spokesman Gilles Gantelet conceded: "If you compare it to the existing situation it's a real improvement. If you compare it to what we want, it's not enough."

The European Competitive Telecommunications Associations' latest scorecard confirmed the continued dominance of incumbents in the broadband market.

But it provided encouraging evidence of new entrants taking advantage of a more competition-friendly performance from national regulators to invest in hi-tech internet networks. Italy, France, Denmark and the UK posted the most impressive increases in broadband uptake, it added.

European Union Transport Ministers will meet in Luxembourg on 11 June 2004 to debate, amongst other matters, a transatlantic open skies agreement.