The European Commission (EC) continues its long-standing push for liberalisation of investment rules in US airlines, arguing that consolidation is needed to compete with growing Asian and Middle Eastern carriers.
Siim Kallas, vice-president for transport at the EC, says that increased regulatory convergence, and full liberalisation of investment rules and air services restrictions between the European Union (EU) and USA is necessary to maintain the competitive advantage of airlines on both sides of the Atlantic, in a speech at the Royal Aeronautical Society and International Aviation Club of Washington DC on 18 April.
Foreign investment in US airlines in limited to 25%.
"The competition is nipping at our heels, challenging us commercially and technologically," he says, referring to carriers from Asia-Pacific and the Persian Gulf region. "If we want to stay strong together, we should strive for even more regulatory convergence and better cooperation in international arenas."
Middle Eastern carriers are slowly moving into markets previously dominated by Europe or US-based airlines. Emirates announced earlier this month that it plans to launch daily flights between Milan and New York John F. Kennedy (JFK) from 1 October, and Qatar Airways has said that it plans to begin daily flights between Athens and JFK in the middle of this year.
Simone Menne, chief financial officer of Lufthansa Group, called Gulf carriers "irrational" market players in terms of capacity and said that they often act as ambassadors of their respective countries instead of focusing on returns on capital, in New York in March. She named Emirates, Etihad Airways, Qatar Airways and Turkish Airlines.
"[The] reply is not very promising to be frank but at least we continue to talk," says Kallas on his continuing discussions with US legislators and officials in the Obama administration regarding investment liberalisation.
He says that liberalisation could be included the in Transatlantic Trade and Investment Partnership talks, which are currently on going.
Calls for liberalisation of investment and capital flows between European and US carriers is not new. Kallas said that the matter was central to open EU-US skies talks in 2010, however the agreement ultimately moved forward without any changes to US ownership rules.
More recently, International Airlines Group (IAG) chief executive Willie Walsh called for liberalisation in investment rules in the USA during a speech in Washington DC in July 2012. He added that US carriers have demonstrated innovation and positive returns on capital that could allow them to become global leaders.
Air traffic management is another area where Kallas sees opportunity for cooperation. He says that interoperability between the EC's Single European Sky initiative and the US Federal Aviation Administration's (FAA) NextGen programme could create operating efficiencies that benefit airlines on both sides of the Atlantic.