Passage of FAA reauthorization bill could end Open Skies talks

Washington DC
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US FAA Reauthorization legislation, in its current form, would likely stop further Open Skies negotiations with Europe "dead in their tracks" if its passes, Ambassador John Bruton warned today.

Speaking at the German Marshall Fund of the United States in Washington DC, the EU Ambassador to the US reiterated his concerns that growing protectionism in the country could derail agreement on second stage Open Skies.

If an agreement is not inked by 2010, either party could withdraw traffic rights secured roughly a year ago during the first round of Open Skies.

One element of the FAA Reauthorization bill would require a three-year expiration period of current anti-trust pacts after the bill's enactment. The three-year window would allow the DOT to determine if policy changes are necessary based on a Government Accountability Office (GAO) assessment.

The renewal process for anti-trust pacts would create a lot of uncertainty for the airlines involved and ultimately damage the interest of consumers at a time when airlines need consumers, says Bruton.

Foreign ownership continues to be a source of contention between the EU and the US, which limits foreign ownership of US carriers to 25%. The EU has been pushing for further investment opportunities in US carriers.

Asked what assurance US carriers have if they make investments in European carriers, Bruton says EU law is above member-state laws and that disputes can be addressed in the European Court of Justice if a member-state tries to renege on a US investment.

As for US labour concerns, he cautions against equating liberalization with the deterioration of the workforce.

"We don't want to do anything to damage employment or employment conditions," Bruton says.

Labour groups will discuss Open Skies concerns during a June meeting in Brussels.