U.S. Disappointed in EU Position on Open Skies

"I am very disappointed that the European Union Council of Ministers has failed to endorse this historic first phase air services agreement negotiated by representatives of both the European Commission and the United States," said Norman Y. Mineta, secretary of the U.S. Department of Transportation. "The agreement would have established open skies between the U.S. and 25 European nations, creating more competition and offering travelers and shippers more transatlantic choices at a lower cost," Mineta continued.

The issues looked much different from the EU perspective. Britain said the EU must push the U.S. for further concessions, according to reports in the Times of London. While the U.S. had agreed to allow EU carriers to own up to 49% of a U.S. carrier, Britain reportedly wanted the ownership level raised to allow majority control.

During the 1990s, British Airways repeatedly attempted to gain a foothold in the U.S. aviation market through share purchases and agreements at USAir (now USAirways), United, and later an alliance with American Airlines. "The fact is that only under a multilateral regime would we see the emergence of truly global businesses competing with each other across multi-hubbed global networks, and offering the international networks that today's international flyers want," said Rod Eddington, chief executive officer of British Airways. "Alliances have gone as far as they can in meeting this need," he told an airline group earlier in the year. He called on regulators on both sides to deregulate markets, not just to liberalize routings.

Britain called for cabotage rights in the U.S. saying it is only fair that European carriers be permitted to operate on domestic U.S. routes since U.S. airlines are allowed to fly between European cities. Based on the current mood, no agreement is likely before the U.S. presidential election in November, so attention has shifted to laying the groundwork for a future agreement.

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