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U.S.-EU Pact Could Revolutionize Air Travel, U.S. Official Says- U.S. Department Of State Advanced Search/Archive Español | Français | Pycckuú | | | You Are In: USINFO Products Washfile U.S.-EU Pact Could Revolutionize Air Travel, U.S. Official Says Transportation official says changes would enhance competition in "dramatic way" By Vince Crawley Washington File Staff Writer Washington – A tentative Open Skies agreement to deregulate air travel between the United States and the European Union could revolutionize trans-Atlantic passenger service by allowing free-market competition for routes and fares, a senior U.S. official says. “A U.S.-EU aviation agreement would not only bring an entirely new level of liberalization to trans-Atlantic air services, but would facilitate the most important reinvention of international aviation we have ever seen,” Jeffrey N. Shane, under secretary for policy at the Department of Transportation (DOT) said December 8. “It can be expected to enhance the quality of competition across the Atlantic in a dramatic way,” Shane said, speaking to the Royal Aeronautical Society in Montreal. The tentative agreement, announced by negotiators November 18, would allow every EU and U.S. airline to fly between every city in the European Union and every city in the United States, according to a Department of State fact sheet. It would allow U.S. and EU airlines to determine the number of flights and their routes and fares according to market demand, as well as to enter freely into such cooperative arrangements with other airlines as code-sharing and leasing. (See related article .) Currently, air services between the United States and European Union countries are conducted under bilateral aviation agreements with each EU member state. A number of the agreements are so-called Open Skies pacts that set liberal ground rules for international aviation markets and minimize government intervention. The U.S.-EU Open Skies agreement, if approved, would replace those bilateral pacts with a single policy. Shane said media accounts seem to miss the importance of the tentative agreement. “I must tell you that many of us on the U.S. side are more than a little puzzled at how accounts of this effort to conclude the most far-reaching agreement in the entire history of international aviation have been reduced to the story of a U.S. Department of Transportation rulemaking proceeding,” he said. “The press seems to have missed the most important point: that the agreement concluded in November by the two delegations, with or without the rulemaking, has the potential to transform the trans-Atlantic aviation market in fundamental ways.” The agreement “brings U.S.-E.U. relations into conformity with the requirements of European law at long last,” Shane said. “The willingness of the United States to eliminate the traditional nationality clause that is currently in every U.S. bilateral agreement -- meaning that an EU airline’s flights to the U.S. will no longer have to begin or end in that airline’s home country -- is more an advantage for EU carriers than for U.S. carriers, and means that consumers on both sides of the Atlantic would enjoy a quality of competition that exceeds anything we have seen up to now,” he said. “Potentially even more important,” he said, “the draft agreement would open an infinity of new possibilities for the reinvention of the EU airline industry. The anachronistic bilateral impediments to otherwise sensible mergers and other combinations – even under existing Open Skies agreements -- would be swept away on day one, and the implications for a more robust and competitive global presence by EU carriers would be profound.” EU transport ministers, Shane said, will take further action on the tentative pact after the outcome of a pending DOT rulemaking that would give foreign investors in U.S. airlines more of a say in business practices.  That proposed rulemaking, which is open for comments from the public until January 6, 2006, would apply only to international investors from countries that have open-skies aviation agreements with the United States and allow similar investments by U.S. citizens in their domestic airlines. (See related article .) Shane said the department will need about two months to evaluate comments after the comment period closes and issue a final rule. The full text of Shane’s speech is posted on the Department of Transportation Web site. Created:09 Dec 2005 Updated: 09 Dec 2005 Page Tools: Print this article E-mail this article USINFO delivers information about current U.S. foreign policy and about American life and culture. This site is produced and maintained by the U.S. Department of State's Bureau of International Information Programs. Links to other internet sites should not be construed as an endorsement of the views contained therein. Home | About USINFO | Site Index | Contact Us | Privacy Topics | Regions | Resource Tools | Products Sorry, you need a JavaScript capable browser to get the best from this page

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