EU-US Open Skies Agreement

EU-US Open Skies Agreement

The EU-US Open Skies Agreement is an air transport agreement between the European Union and the United States. The agreement allows any airline of the European Union and any airline of the United States to fly between any point in the European Union and any point in the United States. Airlines of the United States are also allowed to fly between points in the European Union. Airlines of the European Union are also allowed to fly between the United States and non-EU countries like Switzerland. [ [http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:134:0004:0041:EN:PDF Air Transport Agreement] Official Journal of the European Union, L134 (volume 50, May 25, 2007)] The Agreement replaced and superseded previous open skies agreements between the US and individual European countries.

The agreement was signed in Washington, D.C., on April 30, 2007. The agreement became effective March 30, 2008.

Impact

London - United States

Under the agreement, London Heathrow Airport has been opened to full competition. This ended the exclusive right granted for only two US airlines and two UK airlines (Bermuda II) to fly transatlantic services out of Heathrow. These four airlines were British Airways, Virgin Atlantic Airways, United Airlines, and American Airlines.

This right also exists for third country carriers with incumbent Fifth Freedom rights to carry passengers between London Heathrow and the United States. These rights were previously exercised by Air New Zealand (between Los Angeles-London Heathrow), Air India (between New York-London Heathrow), and Kuwait Airways (also between New York and London Heathrow). El Al also had such rights but chose not to use them, and Iran Air technically also had similar rights, but is prohibited from flying to the US due to US government economic sanctions against Iran.

Singapore Airlines had been allowed to fly the LHR-USA routes. However, due to an extreme shortage of aircraft, the airline was unable to fly the route. Singapore Airlines intends to fly the route once it receives new incoming aircraft.Fact|date=March 2008

Continental Airlines announced it will begin service to London Heathrow from Newark and Houston. [ [http://phx.corporate-ir.net/phoenix.zhtml?c=85779&p=irol-newsArticle_Print&ID=1078367&highlight= Continental Airlines To Begin Service To London Heathrow From Newark and Houston] (Continental Airlines: November 15, 2007)]

Delta Air Lines announced it will begin service to London Heathrow from Atlanta and New York (JFK). [ [http://news.delta.com/article_display.cfm?article_id=10886 Delta Air Lines To Begin Service To London Heathrow From Atlanta and New York (JFK)] (Delta Air Lines: October 17, 2007)]

Northwest Airlines announced it will begin service to London Heathrow from Detroit, Minneapolis/St. Paul and Seattle. [ [http://www.nwa.com/corpinfo/newsc/2007/pr121120071918.html Northwest Airlines To Begin Service To London Heathrow From Detroit, Minneapolis/St. Paul, and Seattle In 2008] (Northwest Airlines: December 10, 2007)]

US Airways announced it will begin service to London Heathrow from Philadelphia. [ [http://www.usairways.com/awa/content/aboutus/pressroom/pressreleases.aspx US Airways To Begin Service To London Heathrow From Philadelphia] (US Airways: November 20, 2007)]

Nevertheless, expansion of transatlantic flights to or from Heathrow will continue to be limited by lack of runway capacity, government limits, and the fact that many take-off slots are owned by incumbent airlines. British Airways holds 40% of slots, while bmi holds 12%.

Other routes

Several airlines are changing their routes and schedules now that the agreement has come into effect. Many airlines are also buying take-off and landing slots at LHR. For example, BMI is trying to buy slots from Varig.Fact|date=March 2008

British Airways has set up a new subsidiary, OpenSkies. OpenSkies is due to begin service between New York JFK and Paris Orly, on June 19 2008. Over the next year, the aircraft fleet is expected to rise to 6 planes serving additional destinations.

Meanwhile, Virgin Atlantic had said that it intended to add daily flights to New York from several European cities, such as Paris, Frankfurt, Milan, Amsterdam, and Zurich, but has since ruled out such services until 2010 at the earliest. [ [http://www.travelweekly.co.uk/Articles/2008/03/04/26858/virgin-atlantic-rules-out-continental-europe-to-us-service-until.html Virgin Atlantic rules out continental Europe to US service until 2010] (Travel Weekly: March 4, 2008)]

KLM announced new service from Dallas/Fort Worth to Amsterdam. [http://www.nwa.com/offers/neweurope2008/ Northwest/KLM expands service to Europe] from the Northwest Airlines website]

Industry consolidation

The agreement has apparently renewed interest in airline industry consolidation, [ [http://www.bloomberg.com/apps/news?pid=20601087&sid=acdfGA2rU5JI&refer=home Bloomberg.com: British Airways May Make Iberia Bid With Equity Group] ] although true take-overs among Flag-Carrier airlines are emotive and difficult to drive through in the face of National and financial interests. British Airways' 2007 plan to buy Iberia Airlines had to be shelved when it became apparent that a Spanish investment bank would prevent the deal, so in 2008 a merger was proposed instead, which would retain both brands along the lines of the 2004 Air France and KLM merger. [ [http://news.bbc.co.uk/1/hi/business/7530961.stm BBC: BA's long-haul route to Iberia tie-up] ]

Fares

There is little consensus about whether increased transatlantic competition will have any effect on fares. Some believe the market is already highly competitive. Other sources have been predicting radical changes, such as €10 flights. [ [http://www.iht.com/articles/2007/04/13/news/skies.php International Herald Tribune: Visions of a €10 ticket to fly across the Atlantic] ]

In April 2007, Ryanair confirmed it was planning to start a new airline (RyanAtlantic) that would operate long-haul flights between Europe and the United States. According to Ryanair's chief executive, Michael O'Leary, the airline intends to start flying in 2010, with flights to 5-6 U.S. cities, including Baltimore and Providence, Rhode Island. The carrier, unlike traditional low-cost airlines, would sell both economy and premium(B&B)-class tickets.Fact|date=October 2008

References


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