U.S. offers "open skies" concessions to EU states

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U.S. offers "open skies" concessions to EU states  =

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Thursday January 23, 12:52 PM EST =


By Robin Pomeroy

BRUSSELS, Jan 23 (Reuters) - The United States has offered to make change=
s to its individual aviation trade pacts with 11 European Union countries=
 to bring the accords into line with EU law and remove a major hurdle to =
cross-border mergers in the industry, it said on Thursday.

Washington is responding to an EU court ruling which last November declar=
ed elements of the "open skies" pacts illegal under EU law, in an effort =
to head off calls by the EU's executive Commission for member countries t=
o rip up their bilateral treaties with the United States and start again.=


"Our goal is to safeguard the existing market-oriented framework for air =
services," John Byerly, a deputy assistant secretary at the U.S. State De=
partment, told Reuters by telephone from Washington.

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The key change would be to delete the "ownership clause" from the pacts w=
hich the industry says has prevented mergers and acquisitions between air=
lines based in different EU states.

In common with most of the bilateral treaties which govern international =
air traffic rights, U.S. open skies deals only confer transatlantic landi=
ng rights on airlines of the country with which each deal was made.

As a result carriers need to keep their national identitities to retain t=
heir international landing rights.

For example possible EU airline mergers such as that considered by Britis=
h Airways (BAY) and Dutch carrier KLM (KLM) have been dogged by doubts ov=
er whether a single merged carrier would keep all of their respective Bri=
tish and Dutch-held international traffic rights.

Byerly said the new-style pacts would guarantee that merged EU airlines w=
ould maintain those rights with the United States.

He said the changes would not recognise the EU as a single transatlantic =
aviation market, however.

All EU states except Britain, Greece, Ireland and Spain have open skies d=
eals with the United States.


CONTAINER THREAT

The European Commission, which campaigned for years, without success, to =
stop member states signing the U.S. bilaterals in the 1990s wants to nego=
tiate a new deal with Washington on behalf of the entire bloc.

Commission transport spokesman Gilles Gantelet said EU states should be w=
ary of accepting the U.S. offer. "Any new bilateral agreement which is co=
nsidered illegal will be challenged in the (European) Court of Justice," =
he said.

Member states would face fines if they fail to comply with November's rul=
ing, Gantelet said.

On Thursday the Commission also called on EU states to give it the power =
to negotiate a maritime anti-terrorism security regime with Washington in=
stead of striking bilateral deals under the U.S. Container Security Initi=
ative.

The Commission claims the CSI, which puts U.S. Customs officers at the wo=
rld's biggest ports to screen containers for possible bombs, favours some=
 ports over others and that trade and customs issues must be handled at E=
U, not national, level.

"It would be more effective to have a community (EU)-wide agreement with =
the United States rather than these piecemeal, bilateral one-off deals," =
Commission spokesman Jonathan Todd told a news briefing. =



=A92003 Reuters Limited. =


Roger
EWROPS

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