ATW Daily News

US State Dept. lauds open skies pact, agrees to delay, second phase

Monday March 26, 2007

Hailing the new EU-US open skies agreement as "a harbinger of further liberalization," the US Dept. of State last week signaled that the Bush Administration is prepared to sign the deal on April 30, that there will be no congressional opposition and that late European conditions regarding delayed implementation and second-stage negotiations are acceptable.

In a concession to the UK, the EU Transport, Telecommunications and Energy Council pushed the accord's effective date back five months to March 30, 2008, to coincide with the opening of London Heathrow's Terminal 5. It also gave member states the option to suspend certain US traffic rights if a second-stage deal is not reached by 2010 (ATWOnline, March 23).

Deputy Assistant Secretary of State John Byerly, who was the chief negotiator for the US, disagreed with the notion that the agreement unfairly benefits US carriers but said the US will accede to the EU's provisions "in concession to critics," according to a State Dept. website.

Regarding second-stage negotiations, the department said, "The two sides have not yet agreed on the content of that phase" but that talks are scheduled to start 60 days after the March 2008 implementation, or the beginning of June. Byerly said he hopes to address "some big issues."

He clarified that EU investors will be allowed to own more than 49.9% of a US airline's combined voting and nonvoting stock "on a case-by-case basis" but that the current 25% limit on voting stock will be maintained. The State Dept. said those provisions "led to a breakthrough."

by Brian Straus

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