Europe-USA aviation liberalisation is facing an increasingly objecting and obstructive US Congress.

Concerns about possible job losses have coalesced with injured institutional pride to block an ownership, investment and control administrative proposal that is central to progress on the larger issue of transatlantic liberalisation. Congressional Democrats, spurred on by the heightened partisan opposition to all things Bush, have followed labour’s lead in raising the politically charged prospect of job losses, while others, following the concerted opposition of Continental Airlines, say the administrative proposal offends and violates congressional prerogatives. Organised labour insists it threatens national security and airline safety.

Jeff Smisek, Continental Airlines W250

JEFF SMISEK "The right to fly is useless without the right to land"

One Republican lawmaker expressed concerns that overseas investors, which could include foreign airlines, might force fleet changes that would favour European Airbus aircraft over those made by Boeing.

But the champions of Open(er) Skies say much is stake: John Byerly, the chief negotiator and architect of the transatlantic agreement, who is the State Department’s deputy assistant secretary for transportation, told a congressional panel of “real concern” that European Union negotiators may lose their appetite for an agreement if they have to wait a year. The next few months are “a unique opportunity” to approve the pact, he said, because State hopes European Transport Ministers will approve the Open Skies agreement in June. They have made the control proposal a condition of approval. The rulemaking, offered by the Department of Transportation (DoT) as an administrative re-interpretation of rules, is vital but would not change the actual statute limiting foreign investment and management of US flag carriers, transportation policy under-secretary Jeff Shane told the same House aviation subcommittee.

Members of the panel disagreed, arguing that it is a significant change that must go through, not around, Congress. Legislation has been offered in both the Senate and the House to block the regulatory proposal, and the highly respected senior Democrat on the house panel, Jim Oberstar, is leading the opposition. Lawmakers from both parties have joined the opposition, including Republicans from New Jersey, home of Continental’s Newark Liberty hub. Challenged over the DoT’s tardy communication to committee members about the rule proposal, Shane said somewhat ashamedly, “no one wishes we had communicated sooner more than I”.

Continental president Jeff Smisek told the panel that the proposal “is a case of arrogant contempt by the DoT of the clear congressional language”. He raised a substantive concern as well: nowhere in the negotiations or the related proposal is the thorny issue of London Heathrow access addressed. In practical terms, slots there are not available, he says, countering: “The right to fly is useless without the right to land.”

Even if Congress takes no action, the proposal faces the potentially fatal prospect of a court challenge. Continental has suggested that it would move to block the ownership rule in court, arguing that the DoT does not have the authority to change so important a rule. Although Shane told the panel that the agency has precedent aplenty to overcome legal challenges, a court case would be a time-consuming one, and would rob the European side of the clarity and certainty it says it needs to move forward on the tentative pact. ■


Source: Airline Business