US officials have admitted they will not be ready with their proposed framework for airline ownership liberalisation in time for the mid-October European Union (EU) Council of Ministers meeting at which the Europeans were to consider it. Without the investment freedom, the European side has said it will not agree to the proposed EU-US Open Skies plan, forged in November 2005.

The surprise resignation of long-serving Transport Secretary Norm Mineta, a staunch defender of the plan, and the rush toward mid-term US elections, made the planned timetable unrealistic. Washington lobbyists say political opposition to the plan in Congress remained strong and the Bush Administration was "simply not going to expand any of its limited political capital on an issue that it sees as marginal when the Democrats will fight any measure".

One lobbyist says that "xenophobic" anti-foreign sentiment, which reached a peak with an abortive Chinese bid to buy a Californian oil company and a Dubai-based firm's move to buy a UK ports operator with US interests, was unabated. The last attempt to reach a new EU-US agreement collapsed in 2004 when it was rejected by European transport ministers. However, a US Transportation Department spokesman says the foreign investment proposal would not be withdrawn.

A European Commission spokesman acknowledges an Open Skies deal with the USA cannot be concluded in October as originally anticipated but says the EU is still confident an agreement can be reached by year-end. It is still possible for the two sides to meet their goal of implementing Open Skies by the summer 2007 travel season. But it seems unlikely carriers will be able to enjoy the benefits of Open Skies so soon. ■

Source: Airline Business