Air Transport

Fast-food chain style airline operations among ideas tabled in effort to break transatlantic Open Skies deadlock

Europe and the USA could be about to give the go ahead to McDonalds-style flying franchises in a bid to break the current deadlock in the stalled Open Skies negotiations.

Talks between senior EU and US negotiators are set to resume on 27 February in Brussels in an effort to hammer out an outline deal to liberalise transatlantic aviation in time for the forthcoming US-EU summit, scheduled for 30 April.

Flight International has learned that on the agenda will be fresh "imaginative" solutions that could allow European airlines much wider access to the US market, taking into account US political restrictions placed on ownership of US airlines and on cabotage - the right of a foreign airline to operate within its domestic borders.

One idea to be tabled is a proposal from Europe to establish a franchise system, where a European airline could effectively take over a US carrier's fleet and fly under its own colours even though it remains under US ownership. Both sides profess continued enthusiasm to strike an Open Skies agreement but Europe says the current basis of agreement remains unbalanced.

A senior EC source says officials could have adopted an Open Skies framework without the controversial investment proposals, although this would represent an about-face as the EC had made investment liberalisation a prerequisite. "The task that the EU transport ministers set us in December was to seek improvements to restore the balance of interests. We have done that, identified possible areas and are in the process of fleshing those out," he says.

A lead US Open Skies negotiator says: "The EU has suggested that we look at 'franchising' as a possible issue for inclusion in the package of enhancements. We're prepared to do so. Franchising arrangements are permitted in the USA, provided the arrangements don't give a foreign franchisor 'control' over the US air carrier franchisee," he says.

A UK airline government affairs expert says: "What is being proposed is likely to be some sort of franchising arrangement whereby you set up an operation very much like a McDonalds or Burger King... the arrangement would probably include a flight codeshare and provisions for either side to exit that arrangement.

"But would it be politically acceptable in the USA? There remains a suspicion that if it looks vaguely attractive to the EU, the USA will not allow it."