An Ongoing Process—A Review of the Open Skies Agreements between the European Union and the United States

Abstract

This article seeks to clarify the implications of the Open Skies agreement reached between the European Union (EU) and the USA in March 2007. It begins by reviewing the background of aviation regulation and the negotiations that have taken place between the European Commission (EC) and the USA over the past few years. It discusses the EU and US perspectives on the development of the transatlantic market and summarizes the key elements of the new Open Skies agreement. It goes on to analyse the probable effects of the agreement and identifies the likely winners and losers. It also highlights the unresolved problems for the EU and the USA. Finally, it concludes that while both sides might not be satisfied with the new agreement, it will nonetheless become a liberalized model for other regions of the world to emulate.

Notes

1. The 1944 Chicago Convention brought together 52 allied nations with the aim of establishing an orderly framework to develop international air transport.

2. The Freedoms of the Air are explained in Appendix 1.

3. Iceland, Norway and Switzerland have also signed Open Skies agreements with the USA.

4. The EU only regulates against abnormal fare levels.

5. A series of adjustments or ‘mini‐deals’ to Bermuda II were made every few years to increase permitted capacity and add more US gateways.

6. This right is known as ‘cabotage’, as defined in Chicago Convention Article 7.

7. Eighth Annual International Aviation Symposium—‘Airline Ownership: Are Citizenship Laws Pass?’: The annual international symposia feature a discussion panel of some of the industry’s leading executives and government officials. Topics covered included lack of citizenship requirements, the government’s rightful role and the impact on alliances.

8. Continental Airlines are alleged to have paid $135 million for three pairs of Heathrow slots in December 2007.

9. easyJet’s recent acquisition of GB Airways, previously operating as a BA franchise partner, has provided the carrier with an enhanced portfolio of slots at Gatwick. As a result, easyJet now has as large a presence at Gatwick as BA.