European airlines: New EU-US pact disappointing


European airlines expressed disappointment that the provisional agreement on a second-stage EU-US open skies accord reached last week did not increase their access to ownership stakes in US airlines in the near term.

The agreement stated that upon legislative change in the US of current foreign ownership restrictions in US airlines (no more than 25% of voting rights), the EU in turn will allow majority ownership of EU airlines by US nationals.

But there is no indication that Congress is moving toward a change in US airline ownership rules anytime soon, leaving European carriers concerned that a second-stage pact will be put in place that does not give them the right to buy controlling stakes in US airlines and/or operate flights between US cities.

“We still have no guarantee that the US will, in the near or even the longer term, lift its barriers to European investment and create a level playing field,” Assn. of European Airlines Secretary General Ulrich Schulte-Strathaus said. “What we have is a process and a commitment from the US that they will continue to talk about liberalizing ownership and control. That in itself is a step forward, but it is not where we hoped we would be.” He said AEA found the agreement reached last week to its “satisfaction” and noted that it “is another step toward liberalization.” But he added that “a lot of work, vision and tenacity lies ahead.”

In contrast, US airlines were enthusiastic about the provisional agreement. “This agreement is a win-win on both sides of the Atlantic,” Air Transport Assn. President and CEO James May said. “It reinforces the strong bond between the US and the EU, and promises still closer cooperation on environmental, security and other important concerns while fostering greater competition. This is a historic milestone for aviation liberalization.”