Soverytired
Well-known member
- Joined
- Jan 30, 2006
- Posts
- 1,572
I think it's probably inevitable. And I don't like it one bit either.
http://www.telegraph.co.uk/money/ma...&grid=&xml=/money/2008/05/22/bcnairline12.xml
Oil price surge may trigger truly open transatlantic skies
By Alistair Osborne in Houston
Last Updated: 11:16am BST 22/05/2008
High level politics and the soaring oil price have combined to create the most positive backdrop yet for EU-US talks focused on the abolition of laws preventing transatlantic airline takeovers, a senior British Airways executive has said.
John Wood, BA's executive vice-president of external relations, said he was encouraged by two sets of negotiations last week that could revolutionise the aviation industry within the next few years. "In the medium-term, I am cautiously optimistic," he said.
British Airways is encouraged by progress EU and US negotiators met last week in Ljubljana, Slovenia, for their first discussions on the second phase of "open skies", the deal struck last year that liberalised flying rights between the two regions.
The first phase deal did nothing, however, to end anachronistic ownership laws limiting EU carriers to 25pc of the voting rights and 49pc of the equity in their American counterparts. US airlines are limited to 49pc of both in EU carriers.
Such rules block the transatlantic takeovers, and accompanying cost-cutting, that the industry is crying out for now that oil has rocketed to $135 a barrel - a level at which virtually no airline can make a profit.
While Mr Wood admitted that the aviation talks in Slovenia ended, as expected, with little concrete progress, he pointed to a crucial breakthrough at more high-level discussions a few days earlier in Brussels.
This was at the second meeting of the Transatlantic Economic Council (TEC), set up in April 2007 by President Bush, German Chancellor Angela Merkel and European Commission president Jose Manuel Barroso.
The TEC, whose European delegates include trade commissioner Peter Mandelson, was established to secure barrier-free trade between the EU and the US - including in aviation.
On May 13, the TEC issued an "EU-US Open Investment Statement", which Mr Wood said would "put top-down pressure on negotiations over an aviation agreement".
The joint-statement from the TEC explicitly states that: "An open economy, including an open international investment regime, is indispensable to fostering sustainable economic growth...Countries should avoid new restrictions and strive to eliminate existing restrictions."
Mr Wood said the US special envoy to the EU, Boyden Gray, opened the Slovenia aviation talks with reference to the TEC statement.
"One of the things aviation suffered from is that it has always been done in a black box," Mr Wood said. "That has hindered our ability to make progress. But the EU and US have now made a commitment to open investment."
He said this extended to all industries, though acknowledged there were some restrictions around defence.
Mr Wood said such a political context was "helpful" as the EU presses the US to create a full-blown open aviation area, including access to the American domestic market. Many observers see the US resistance as a protectionist measure to prevent takeovers of US carriers, such as United and Continental, by stronger European airlines.
As part of last year's "open skies" deal, the EU negotiated an opt-out for any member state. This allows an EU member to claw back flying rights granted to Washington, such as access to Heathrow, unless the US liberalises its market by 2010.
"It's a nuclear button, but it's there to be pressed as a final resort," Mr Wood said.
He acknowledged the US negotiating team was still a long way from agreeing full-blown liberalisation, instead bogging down the Slovenia talks on sideshows such as the lack of access for US carriers to Milan's Linate airport.
However, he believed that after the US election, there would be growing pressure on the American side for a change. "EU carriers want it and, with oil at $130, I think we are going to see US airlines saying we really have got to get out of the dark ages," he said. "That's going to flush out the opponents, who are mainly labour - the unions. The unions are resisting, but they are also resisting the economic benefits of a properly liberalised market."
http://www.telegraph.co.uk/money/ma...&grid=&xml=/money/2008/05/22/bcnairline12.xml
Oil price surge may trigger truly open transatlantic skies
By Alistair Osborne in Houston
Last Updated: 11:16am BST 22/05/2008
High level politics and the soaring oil price have combined to create the most positive backdrop yet for EU-US talks focused on the abolition of laws preventing transatlantic airline takeovers, a senior British Airways executive has said.
John Wood, BA's executive vice-president of external relations, said he was encouraged by two sets of negotiations last week that could revolutionise the aviation industry within the next few years. "In the medium-term, I am cautiously optimistic," he said.
The first phase deal did nothing, however, to end anachronistic ownership laws limiting EU carriers to 25pc of the voting rights and 49pc of the equity in their American counterparts. US airlines are limited to 49pc of both in EU carriers.
Such rules block the transatlantic takeovers, and accompanying cost-cutting, that the industry is crying out for now that oil has rocketed to $135 a barrel - a level at which virtually no airline can make a profit.
While Mr Wood admitted that the aviation talks in Slovenia ended, as expected, with little concrete progress, he pointed to a crucial breakthrough at more high-level discussions a few days earlier in Brussels.
This was at the second meeting of the Transatlantic Economic Council (TEC), set up in April 2007 by President Bush, German Chancellor Angela Merkel and European Commission president Jose Manuel Barroso.
The TEC, whose European delegates include trade commissioner Peter Mandelson, was established to secure barrier-free trade between the EU and the US - including in aviation.
On May 13, the TEC issued an "EU-US Open Investment Statement", which Mr Wood said would "put top-down pressure on negotiations over an aviation agreement".
The joint-statement from the TEC explicitly states that: "An open economy, including an open international investment regime, is indispensable to fostering sustainable economic growth...Countries should avoid new restrictions and strive to eliminate existing restrictions."
Mr Wood said the US special envoy to the EU, Boyden Gray, opened the Slovenia aviation talks with reference to the TEC statement.
"One of the things aviation suffered from is that it has always been done in a black box," Mr Wood said. "That has hindered our ability to make progress. But the EU and US have now made a commitment to open investment."
He said this extended to all industries, though acknowledged there were some restrictions around defence.
Mr Wood said such a political context was "helpful" as the EU presses the US to create a full-blown open aviation area, including access to the American domestic market. Many observers see the US resistance as a protectionist measure to prevent takeovers of US carriers, such as United and Continental, by stronger European airlines.
As part of last year's "open skies" deal, the EU negotiated an opt-out for any member state. This allows an EU member to claw back flying rights granted to Washington, such as access to Heathrow, unless the US liberalises its market by 2010.
"It's a nuclear button, but it's there to be pressed as a final resort," Mr Wood said.
He acknowledged the US negotiating team was still a long way from agreeing full-blown liberalisation, instead bogging down the Slovenia talks on sideshows such as the lack of access for US carriers to Milan's Linate airport.
However, he believed that after the US election, there would be growing pressure on the American side for a change. "EU carriers want it and, with oil at $130, I think we are going to see US airlines saying we really have got to get out of the dark ages," he said. "That's going to flush out the opponents, who are mainly labour - the unions. The unions are resisting, but they are also resisting the economic benefits of a properly liberalised market."
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