US, EU Open Skies Clouds May Part
Completion of an agreement is possible ''within weeks''
PRAGUE, the Czech Republic - 05/25/04 - The US and the European Union are "close" to agreeing on an Open Skies deal to free up their transatlantic aviation market.
The announcement by US Secretary of Transportation Norman Mineta comes "thanks to the substantial progress" made by the US and the EU during the recently completed fifth round of negotiations with completion of an agreement possible "within weeks."
Speaking before the American Chamber of Commerce in Prague, Mineta said a comprehensive transatlantic open skies agreement "will create the largest, freest market in air transportation ever, with immediate market-opening benefits for all 25 EU member states."
The US currently has Open Skies agreements with 15 of the European Union's 25 member states.
According to the Department of Transportation, the average airfare decreased twice as much in Open Skies transatlantic markets between 1996 and 1999 - about 20% - as it did in transatlantic markets without Open Skies agreements, approximately 10%.
For the Czech Republic and the other 14 EU Open Skies countries, the agreement "strengthens and solidifies our relationship and opens the door for deepening cooperation in new areas of safety, security, competition, and the environment," Mineta said.
The agreement, he added, "affords carriers and communities direct access between the US and the 10 European countries currently constrained by bilateral legal restrictions."?
In addition, "accepting the concept of the "European carrier would afford European airlines flexibility to fly from any European point to any point in the US and beyond," he said.
The EU has said that for an open skies agreement to be reached the US must open some of its domestic routes to European airlines, but the Bush Administration has refused, saying that opening up it domestic market to foreign carriers would require legislative changes it is not prepared to seek.
Instead Mineta said that the US is proposing to raise the allowable foreign ownership limit on US airlines to 49% from the current 25%.
However, the issues of 'cabotage' - the right of a foreign airline to fly domestic routes in another country - and 'establishment' - the right of a foreign carrier to establish a domestic airline in another country - were "off the table," he said.
"Both, from a legislative perspective, would be very difficult to get passed in Congress...That was something I would not be able to have as part of the discussion involving this agreement," he said.
However, Mineta stressed he is "confident" that the legislation needed to approve the change in foreign ownership level would be passed by Congress.
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