FAA bill could jeopardize EU-US bilateral aviation cooperation

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The European Union (EU) has warned the White House that it risks jeopardizing bilateral cooperation on aviation safety and transatlantic alliances, as well as second-stage open skies talks, should "restrictive measures" remain part of current US FAA Reauthorization draft legislation.

"The FAA Reauthorization bill in its current version requires that maintenance organizations outside the US should be inspected by the FAA twice a year. This provision contradicts the EU-US Aviation Safety Agreement and would impede its implementation," writes EU ambassador to the US John Bruton in three separate, but identical letters to US transportation secretary Ray LaHood, secretary of state Hillary Clinton and Lawrence Summers, director of the White House's National Economic Council.

In the letters, obtained by ATI, Bruton points out that the June 2008 EU-US Aviation Safety Agreement was built "on the mutual trust in each others safety systems", and allows for reciprocal treatment of aeronautical repair stations. In the future it would also involve mutual recognition of certification of aircraft operations and training organizations as well as licensing of instructors and pilots.

While the current FAA Reauthorization draft legislation would result in "extra costs for the European and US industry overall" and would "jeopardize jobs", says Bruton, the negative effects "are nonetheless likely to be greater for the US, which hosts more than three times as many repair stations as Europe and currently trains, according to a conservative estimate, 12,000 European pilots".

He adds: "Having to inspect US repair station facilities just once a year would cost US industry $35 million per year compared to $1.1 million with the bilateral safety agreement in force. Requiring pilots to be trained elsewhere would represent a loss of business of at least $72 million for the American pilot training industry. Therefore industry, including representatives of US repair stations, has repeatedly called for the withdrawal of this provision."

Furthermore, says Bruton, the draft legislation limits the possibilities of investment in US airlines and threatens transatlantic alliances, such as open skies.

"By requiring that 'citizens of the United States control all matters pertaining to the business and structure of the air carrier, including operational matters such as marketing, branding, fleet composition, route selection, pricing and labour relations', the draft legislation would hamper the implementation of the existing EU-US Air Transport Agreement, which entered into force in March 2008 and in particular the provisions on franchising and branding," says Bruton.

"Moreover, this provision would dangerously impair the ability to enter into meaningful second stage negotiations as foreseen by Article 21 of the EU-US Air Transport Agreement, which aim at establishing a reciprocal investment regime based on mutual confidence providing new opportunities between the EU and the US in a sector which badly needs it."

The EU is also concerned about an additional provision requiring all anti-trust immunity grants to sunset three years after the date of enactment. This would "put in question carefully constructed agreements among airlines that are designed to offer consumers a better and more seamless global product" and it would "also prevent future alliances from forming given the difficulties in overcoming the regulatory hurdles", says Bruton.

He asks that the President Barack Obama administration gives "due consideration" to these concerns "and halt any attempt to raise barriers in the transatlantic aviation market".