Hello Open Skies

Press statement from UK Secretary of State for Transport Douglas Alexander:

"As you will have heard, the Transport Council has just agreed the terms of a first stage liberalising air transport agreement between the European Union and the United States.

What this means is that, for the first time, all restrictions on routes, fares and frequencies will be removed. EU airlines will have the opportunity to mount services from any EU airport to any US airport. And the legal uncertainty hanging over our bilateral arrangements is ended.

This agreement will bring new opportunities for UK airlines and new benefits for UK passengers. The ending of the arcane restrictions of the Bermuda II agreement - such as the prohibition on flying from Heathrow to the state of Texas - will allow UK airlines to streamline their operations to better reflect the needs of the market. And the end of the restrictions on the number of carriers at Heathrow will allow new competition on UK-US routes, unlocking significant consumer benefits.

My European colleagues and I have been clear, this afternoon, that this deal is just the first stage. Our goal remains a fully liberalised Open Aviation Area, free of restrictions on ownership and control, and we have confirmed today that the mandate we gave the Commission back in 2003 to deliver this remains in place.

Following my intervention, the Council has also set out a clear timetable - with real incentives - to reach stage two quickly. We have secured, in effect, now not simply a commitment from the Americans to talk, but an obligation on the Americans to act in relation to stage two.

This means that the Commission will engage with the US immediately, and second stage negotiations will begin by the end of the year. We will review the progress of those negotiations in 2009. If a second stage deal has not been done by the end of 2010, the EU will automatically withdraw traffic rights unless the Council decides unanimously not to do so.

This means that I have ensured that the UK will have the right - in 2010 - to re-impose some or all of the restrictions that US carriers face today. I hope very much that this will not be necessary. But this sends a very clear signal to the US that we are serious about making early progress to a second stage deal, and reflects that UK carriers' concerns have been listened to by us.

Finally, we have agreed that the deal will take effect from 30 March 2008. Amongst other things, this will help to ensure that airlines have more time to plan new services, and airports will be better able to accommodate them and their passengers.

I said to the Transport Select Committee that I would not sign up to a deal which was not in Britain's best interests. I also noted the strong views expressed both for and against this deal. This deal sweeps away outdated and illegal restrictions which stand at odds with our policy of air services liberalisation. It delivers real benefits for UK consumers of up to £250m a year. It provides an open, deregulated transatlantic market place in which UK carriers - both existing and new - are well placed to compete. It sets out a clear and effective process for delivering our ultimate goal of a fully liberalised EU-US open aviation area. And it will provide a real impetus to further deregulation and modernisation of the international aviation industry around the globe.

By working together, with our European partners, we have secured the right deal for the UK, for the EU, for the industry and passengers."

Press statement from the 2791st Transport, Telecommunications and Energy Council meeting
Brussels, 22 March 2007

EU-US negotiations for an air transport agreement

1. The Council welcomes the results of the negotiations between the European Community and its Member States and the United States of America on a first stage comprehensive air services agreement.

2. The Council approves the agreement which will be endorsed at the forthcoming EU-US Summit on April 30th in Washington.

3. The Council also re-iterates its ultimate objective of a fully liberalised open aviation area covering the EU and the US in accordance with the mandate agreed by the Council in June 2003. It underlines the importance of reaching a second stage agreement in order to pursue the benefits of liberalisation on both sides of the Atlantic. It calls upon the Commission to engage robustly with the United States government so as to secure this goal as quickly as possible.

4. The Council instructs COREPER to proceed without delay with the necessary formalities for the signature of the agreement. In this respect, the Council confirms that:

a) the provisional application of the agreement will take place from 30 March 2008. The Commission was asked to secure agreement of the United States to confirm their agreement to reflect this;

b) if no Stage 2 agreement has been reached within 12 months of the start of the review mentioned in article 21 (3), any Member State may notify to the Commission which traffic rights in relation to its own territory it wishes to suspend. Such traffic rights may not include any rights specified in the agreements mentioned in Annex 1 to the Agreement. The President of the Council on behalf of the EC and its Member States shall then give notice of the suspension of such rights to the US in accordance with Article 21 (3).

However, the Council, acting by unanimity on a proposal from the Commission, may decide not to give notice of suspension or subsequently to withdraw it.

5. The Council requests the Commission to draw up provisions to that effect for insertion in the draft Council Decisions on signature and conclusion of the EU-US air transport agreement.