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More Barriers to Open Skies?

Ownership continues to be an issue for U.S.-based air operations. A recent attempt by the U.K.-based Virgin Group to launch Virgin America was blocked by the U.S. Department of Transportation (DOT) because the proposed start-up airline operation is not 75% owned and controlled by U.S. citizens. According to DOT, Virgin America would have to demonstrate at least 75% of its voting equity is held by U.S. citizens and it is independent of the Virgin Group.

Also in the United Kingdom, Ian Pearson, minister of state for climate change and the environment, reportedly called U.S. air carriers’ attitude towards carbon emissions “a disgrace.” The minister pointed out that the U.S.-based Air Transport Association (ATA) have protested the plan to bring airlines into the European Union’s Emissions Trading Scheme starting in 2011.

In spite of a negative undercurrent, the European Union hoped to get negotiations rolling with the United States. Meanwhile, it is seeking a separate open skies agreement with Canada.

The E.U.-Canada deal could generate benefits to consumers of $94 million through lower fares. In addition, it could create 3,700 jobs in the first year. Canada has separate bilateral agreements with 17 E.U. member states that, the European Commission says, are in conflict with E.U. law.

According to Air Transport World magazine, the Canadian Airports Council, “embraced the proposal, urging the Canadian government to ‘make concluding an agreement a priority.’”

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