US-Heathrow departures up 15.3% since 2007: EC and DOT

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Departures on US-London Heathrow routes have risen by double digits compared to three years ago due to the implementation of the first stage EU-US open skies agreement, a joint study by the EC and US DOT finds.

The two regulators, in their examination of the competitive landscape, say that while overall capacity has decreased in the US-EU market since 2007 "likely due to economic conditions", there has been a diversification of services, with new US-Heathrow services accounting "for much of the changed landscape".

On the US-London Heathrow routes, departures "are up 15.3% versus 2007 and overall seats have increased by 8.7%", note the EC and DOT.

Another important result of the EU-US air transport agreement, which was made effective in March 2008, "was to formalise cooperation on competition matters between the [EC] and DOT", they say.

"Annex 2 to the agreement allows for general exchange of views and experience between the two authorities and aims at inter alia reducing the potential conflicts in the application of the competition regimes in the EU and US and promoting compatible regulatory approaches through a better understanding of the methodologies, analytical techniques and remedies used in the respective competition reviews of the Commission and DOT."

As a result, cooperation between EC and DOT on competition matters "has been fruitful, extending from discussions of analytical issues in specific cases, with the parties providing appropriate waivers to cooperation on this research project".

The first-stage negotiations between the EU and US did not result in removal of all regulatory barriers, notably those on ownership and control, prohibiting EU and US carriers from merging. On 24 June 2010, a protocol to amend the first-stage agreement was signed, but the protocol did not remove the foreign ownership and control restrictions.

Both sides did, however, commit to the shared goal of removing market access barriers to maximize benefits, including enhancing the access of airlines to the global capital markets, and the development of a process of cooperation in this regard, note the DOT and EC.