UK could block EU – US ‘open skies’ deal

Britain could be set to block the European Union’s attempt to agree an agreement to liberalise transatlantic air travel with the United States – a so called ‘open skies’ deal. The EU and the US announced that they had rached a ‘tentative accord’ described as a ‘significant step’ towards opening up transatlantic flights and the airline industy to increased competition on Friday.

However, the UK’s two leading long-haul airlines – BA and Virgin – have both said they will urge the British Government to reject the deal in its current form. The two airlines, along with American Airlines and United Airlines of the US, are the only airlines allowed to fly transatlantic services from Heathrow, but this would change if the deal was accepted.

Although the European Transport Commissioner, Jacques Barrot, said that EU and US negotiators had made ‘decisive progress’ after four days of talks in Brussels last week, the airlines say the draft agreement contains very little that was new and is still heavily biased in favour of American airlines.

Talks between the EU and US stalled last December when the US Congress refused to sanction a change in ownership rules which would have allowed foreign airlines to exercise management control over American airlines.

The two rounds of negotiations which have taken place since were designed to allow the US to come up with fresh concessions to make up for this and rebalance any agreement. But the UK airlines say that the concessions agreed as part of the deal announced on Friday are ‘miniscule and of hardly any value at all’.

They are particularly critical that the agreement does not address the key issues of access to the US domestic market for EU carriers and EU investment in US airlines, while giving any American airline the right to fly into Heathrow and beyond to the rest of the EU.

A BA spokesman said: ‘We don’t feel this is a good deal for the EU or Britain. It is a dead end rather than a pathway to a truly open aviation area.’ Steve Ridgway, the chief executive of Virgin Atlantic, added: ‘We would love to see full and proper open skies but this draft agreement doesn’t come near that. This appears at first glance to be a missed opportunity to create a truly competitive transatlantic aviation market.’

The EU Transport Council will meet on 22 and 23 March to consider the outline agreement, but Douglas Alexander, the UK Transport Secretary, is under pressure from BA and Virgin to veto the deal. He will also face of attempts by other member states, notably Germany and Ireland, to push it through.

The Government hinted last night that it would back the airlines. A spokesman for the Department for Transport said: ‘We would like to stress that a final deal has not yet been reached. We have always said that we wanted to see an agreement which was balanced, meaningful and robust.’

The UK has the power to veto the agreement because it is not dealt with under the system of qualified majority voting. The UK accounts for 40 percent of the entire EU – US air market, thanks largely to Heathrow’s dominant position as the world’s largest international airport.

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