New EU-wide ‘open skies’ policy affirmed
At an ‘historic’ meeting in Luxembourg yesterday, the European Commission was handed responsibility by the British government to negotiate a new ‘open skies’ agreement with the United States and other non-EU countries, effectively lending support to the wholesale liberalisation of the airline industry.
Transport ministers from the EU’s 15 governments backed the plans.
EU commissioner Loyola de Palacio said: ‘This is an historic decision. Today, we have reached a deal that will enable the European Union to assert itself at international level and to work for the benefit of its consumers and its aviation industry.’
But British Airways and Virgin Atlantic may lose out as their monopoly on transatlantic flights from the UK to the US could be curtailed.
The new agreement will rework the ‘Bermuda 2 agreement’ which only permits American Airlines, United Airlines, BA, Virgin, to control flights fly between Heathrow and the US.
Once the paperwork is in place, it is expected other EU carriers will have the opportunity to run services in the lucrative market.
Other non-EU destinations are also up for grabs as the Commission will present the EU’s point of view in hundreds of other air traffic agreements.
Moreover, the new policy will clear the path for possible super-mergers between airlines.
But BMI British Midland said the proposals stopped short at allowing other carriers to operate out of Heathrow. It said further liberalisation of landing slots, dominated by BA and Virgin at present, may be set back several years because of the decision.
Last year, the European Court of Justice ruled that eight bilateral agreements between European countries and the United States breached EU laws.
Separately, BMI British Midland chairman, Sir Michael Bishop, said on Thursday the much-touted merger of his airline with Sir Richard Branson’s Virgin Atlantic would not be going ahead.
He said although extensive discussions had taken place between both parties, a final deal was far away from completion.
A spokesman for the US Department of Transport said: ‘We look forward to beginning negotiations with the commission.. We will seek to build on the foundation set in the open skies agreements we have concluded with 11 of the 15 European Union member states.’
It is thought the new policy could save consumers $5 billion a year and encourage 17 million more trips per year.
