Following the launch of negotiations at the 2003 Transatlantic Summit and a
further eleven working sessions, the negotiators have attained today results
that are unprecedented in international aviation since the Chicago Convention
of December 1944. Building on the creation of the European internal market – a true success story for the European Union – solid foundations are now being laid for a revolution in
the international aviation industry that will see it treated as a
"normal" global industry. The first ever EU-U.S. agreement would
encompass 60 percent of world traffic. It would be a concrete and substantial
move towards closer transatlantic relations and a major contribution to the
Lisbon Strategy.
Using the momentum created by the joint visit to Washington of the Transport
Council President Mr. Tiefensee and Vice-President Barrot in early February,
two rounds of negotiations were held on February 6–9
in Washington and February 27–March 2 in Brussels.
These rounds allowed negotiators to identify and agree upon substantial
additional provisions that the European Delegation was seeking to complete the
preliminary November 2005 Agreement. The absence of a reform in the ownership
and control regime in the United States, sought after by the European Union in
November 2005 in order to provide access to the U.S. domestic market for EU
airlines, had left the Transport Council greatly disappointed. The Council had
instructed the Commission to enter into urgent consultations with the U.S. to
seek elements that could be used to restore a proper balance of interests.
To this end, the text as agreed on March
2nd provides for:
a) An additional protocol on ownership, investment and control
consisting of:
b) A unilateral granting by the United States to the EU of so-called '7th
Freedom rights for Passengers' to a number of non-EU European countries,
i.e. the right for Community airlines to operate flights between a city in the
United States and a city in these European countries.
c) A number of access rights for Community airlines to the U.S. 'Fly
America' programme for the transport of passengers and cargo financed by
the U.S. Federal government. Such rights have never previously been granted by
the United States to a third country.
d) Rights in the area of franchising and branding of air services,
defined for the first time in such an agreement, to enhance legal certainty in
the commercial relations in between airlines;
e) Provisions on antitrust immunity in order to facilitate the
development of airline alliances;
f) Provisions on the development of joint EU-U.S. approaches in
international organisations and in relations with third countries;
g) Provisions on EU-U.S. technical cooperation in relation to climate
change.
These elements are to be added to the
existing provisions of the November 2005 agreement, which has been welcomed by the
Council on several occasions and provides for the following:
a) The recognition of all European airlines as "Community air
carriers" by the United States, allowing for the consolidation of the EU
aviation sector and the compliance with the November 2002 Court cases in the
so-called 'Open skies judgments';
b) The possibility for any "Community air carrier" to fly
between any point in the EU to any point in the U.S., without any
restrictions on pricing or capacity. This freedom does not exist for the moment;
c) The possibility to operate flights beyond the European Union and the
United States towards third countries ('5th Freedom');
d) The possibility for the EU airlines to operate all-cargo flights
beyond the United States to a third country, without a requirement that the
service starts in the EU (7th Freedom - All Cargo), U.S. airlines will preserve
their existing rights only;
e) Provisions on commercial arrangements between airlines (code-sharing,
wet-leasing…).
f) Unpreceeded Regulatory convergence mechanisms notably in competition,
state aid and security. The provisions on security are key in work towards
a 'one-stop security' approach.
g) Institutional mechanisms including a Joint Committee to handle any
issue covered by the agreement, a dispute settlement procedure with arbitration
provisions.
This week, the negotiators also agreed an article on further market access
to maximize benefits for consumers, airlines and labor on both sides of the
Atlantic since it foresees a transition to second step negotiations with a
priority agenda. The article also foresees a mechanism to guarantee the second
stage agreement in view of the ultimate EU objective of an Open Aviation Area
between the European Union and the United States.
The first stage agreement, if approved by the Council of Transport
Ministers, would apply as of October 28th 2007.
Among the benefits, this agreement opens the possibility of an additional 26
million extra passengers on transatlantic flights over a period of 5 years.
This compares with current annual traffic of just under 50 million. At the end
of the fifth year, this will mean that the market will be 34 percent higher
with the agreement than without the agreement.
By eliminating the bilateral agreements and their restrictions on traffic
rights, we can already obtain a reduction in the cost of tickets for companies
and private customers, with consolidated economic benefits of between 6.4 and
12 billion euros over a period of 5 years.
The removal of barriers could lead to the creation of around 80,000 jobs
(spread more or less equally between the U.S. and the EU).
The cargo market would see growth of between 1 and 2 percent, which is
highly significant given the size of the market globally (with the European and
American industry accounting for 70 percent of the global fleet).
For further information please visit: http://www.eurunion.org/newsweb/HotTopics/OpenSkies.htm