EC To Start Air Talks With U.S. 'Next Month' By Martial Tardy June 6, 2003 The European Commission intends to launch talks next month on a transatlantic air transport agreement that will generate more competition but also boost passenger numbers, after winning negotiating authority yesterday from Europe's transport ministers meeting in Luxembourg. A report by U.S. consultants The Brattle Group "has estimated that an EU/U.S. Open Aviation Area would generate upwards of 17 million extra passengers a year," the EC said. A summary of the study obtained by The DAILY last year found such a zone would boost competition, reduce inefficiencies and save several billion dollars or euros (DAILY, Dec. 19, 2002). "We aim to launch negotiations with the U.S. within a month on an agreement that will bring together the two largest aviation markets in the world," said EU Transport Commissioner Loyola de Palacio. U.S. DOT Secretary "Norman Mineta has a counterpart to talk to, and her name is Loyola de Palacio," said Greek Transport Minister Christos Verelis. The EC hopes to create a transatlantic free trade area -- now dubbed Open Aviation Area. "It would give EU and U.S. airlines complete freedom to serve any pair of airports in the EU and U.S.," the EC said. "EU airlines are currently able only to operate between their own [home country] and the U.S. and between airports within the EU." The Brattle Group estimated the additional output in aviation and related industries generated by the Open Aviation Area would range from about $3.6 billion to $8.1 billion a year. Ministers agreed to let the EC negotiate market access and traffic rights but stopped short of handing over airport slot allocation, even though France and Spain wanted a specific reference to the issue. The EC warned that if capacity constraints prevent new entrants from operating, it "would examine the situation and take the appropriate measures." Most insiders expect access to London Heathrow Airport by U.S. and continental European carriers to be at the heart of intense talks. Increased competition in a liberalized market would generate "consumer benefits of at least $5 billion a year," the EC said. Putting more pressure on North Atlantic fares may not be what airlines need right now, but the Association of European Airlines still welcomes the news about the Open Aviation Area. "It will be good for consumers because it will foster competition and innovative new air services, and it is good for Europe because the EU will be able to negotiate on equal terms with the United States," said Rod Eddington, Association of European Airlines (AEA) chairman and British Airways CEO. In talks, it is expected the Europeans will press for access to the U.S. internal market and to scrap the U.S. "Fly America" policy. The Open Aviation Area will be "good for airlines because it will create a level playing field for fair and equal competition and help to deal with differing policies on competition, security, state aids and insurance," said Eddington. The European Commission and the AEA believe transatlantic liberalization will pave the way for mega-mergers between U.S. and EU carriers. The Europeans will try to lift restrictions limiting foreign ownership of U.S. airlines at 25% -- a ceiling U.S. lawmakers are already considering raising to 49%, the same as in Europe. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.natalielaughlin.com/ TnT Webdirectory: http://search.co.tt *********************************************************