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Aviation History
2003
2003 - 0376.PDF
AIR TRANSPORT OPEN SKIES JUSTIN WASTNAGE / BRUSSELS EC prepares to drive bilateral talks Brussels plans to take on high-profile negotiations and outsource others to countries with significant expertise The European Commission hopes to present to European Union mem ber states next month its formal request to take over bilateral air ser vice negotiations, after the plan's expected approval at a high-level meeting this week. The two-stage proposal, thought to include a tem plate for interim revisions of exist ing bilaterals, comes as the USA offers an alternative deal to comply with a European Court of Justice (ECJ) ruling on the legality of exist ing open skies agreements. Sources within European trans port ministries say they expect to receive a wide-reaching mandate at the meeting of transport ministers on 29 March, combined with an agreement that the EC will not seek to nullify existing bilaterals while nations debate how much power to give Brussels. The EC is keen to han dle high-profile, complex negotia tions, such as those with Japan, Russia and the USA, but is likely to propose outsourcing the rest of the estimated 1,500 current bilaterals to countries with significant expertise. France would be expected to lead talks with North Africa, and Spain would conduct Latin American negotiations. The pro posal will face delays from several of the more powerful countries, led by the UK, which are thought to be reluctant to relinquish ultimate power of veto. The Netherlands is to request increased voting weight ing for smaller countries. Meanwhile, the EC is rejecting new US proposals to renegotiate existing open skies bilaterals with out nationality clauses as "unwork able". Frank Benyon, the EC's prin cipal legal adviser, says that it "would be difficult" for any mem ber state to revise its existing bilater als to comply with the ruling, even excluding nationality clauses. The US government has drawn up a new proposal which would give all EU airlines equal operating rights to the USA, regardless of country of ownership. Sources within the EC view the proposal as an attempt by the USA to "divide and conquer", Australian low-fare carrier Virgin Blue wants regulators on both sides of the Tasman to protect it from what it calls the "anti-competitive effect" of the proposed Qantas-Air New Zealand (ANZ) tie-up. Qantas announced plans to acquire a 22.5% shareholding in ANZ last November, but the deal is yet to get full approval from both countries. Detailed Virgin Blue sub missions to both governments claim its path into the New Zealand domestic and trans- Tasman markets is now littered with barriers to entry in the form of airport access, monopolies on ground handling, and the ease with which ANZ and Qantas could use their own low-cost carriers to suppress Virgin Blue's growth. Virgin Blue says ANZ and Qantas, through existing arrange ments with airports, control key capacity at these and other air ports. "Air New Zealand is the monopoly supplier of many ground support and handling ser vices in New Zealand," it adds. The airline also warns of "the threat of strategic capacity and pricing con- creating weaker bilaterals with each member state to avoid more wide- reaching negotiations. ECJ advocate general Antonio Tizzano dismisses the possibility of modifying bilaterals as "unthink able, not from a legal point of view, but from a practical viewpoint". He points to areas such as safety, slots and computer reservation systems as complicating factors. "Can you imagine a situation where the countries negotiate air traffic rights, the EC negotiates IT systems and a co-ordinator brought in to ensure commonality and compliance to EU law?" he says. ADDITIONAL REPORTING BY KAREN WALKER IN WASHINGTON DC duct by Air New Zealand and Qantas, particularly through their low-cost operations." Virgin Blue is calling for ANZ to be required to divest its low-cost arm Freedom Air and for restric tions to be placed on ANZ and Qantas establishing another low- fare airline. It also wants restraints on Qantas using its Australian Airlines arm, in addition to Impulse and Jet Connect aircraft, on trans-Tasman, New Zealand and Pacific routes for three years. The airline also wants capacity constraints removed, including those on gates and check-in facili ties, at gateway ports of Auckland, Christchurch and Sydney. Virgin Blue says it is committed to beginning operations on the routes, with or without the pro posed alliance, but warns that the "timing and scale will depend on the barriers to entry". • ANZ will suspended direct Sydney-Los Angeles flights on 27 April, easing regulatory concerns over the proposed link with Qantas. Also suspended are two weekly ser vices between Auckland and Cairns. Israir and competitor Arkia are to co-operate to cope with crisis ALLIANCES Israeli rivals become friends as airline downturn begins to bite Israeli rivals Arkia and Israir are negotiating a comprehensive co-operation deal to help them to survive the country's airline crisis. The two privately owned airlines have been fierce competitors in domestic and international markets but are now in talks to create a tie-up which will allow them to make better use of their resources. Arkia operates a fleet of four ATR 72s, three Boeing 757s and four de Havilland Dash 7s on domestic flights, while its international network is made up mostly of European routes. Israir, which has four ATR 42s and two 757s, also operates domestic flights and international charter flights to Europe. In July Israir plans to introduce New York services with a leased Boeing 767. Arkia president Israel Borovitch says that the talks with Israir are aimed at "better utilising the fleets and other resources", while Sabina Biran, president of Israir also confirmed that the talks are under way. "The situation calls for co-operation," she says. COMPETITION PAUL PHELAN / CAIRNS Virgin Blue demands protection from tie-up www.flightinternational.com FLIGHT INTERNATIONAL 18-24 FEBRUARY 2003 13
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