US plays down prospects of deal with EU on control of airlines
BRUSSELS (AFP) — A leading US transport official has played down Europe's chances of obtain the right to hold controlling stakes in US airlines, ahead of fresh negotiations on a wide-ranging "open skies" deal.
Europe will need to present a "very convincing case," US Deputy Assistant Secretary for Transportation Affairs John Byerly told AFP ahead of the talks in Brdo, Slovenia on Thursday and Friday.
Washington has concerns over the idea of agreeing reciprocal aviation investment opportunities with EU carriers, he said citing the case of Italian airline Alitalia, which has been propped up by state loans.
Comments by Italy's new conservative Prime Minister Silvio Berlusconi that Alitalia should remain Italian "makes my job more difficult if I want to encourage liberalisation," said Byerly.
After more than four years of often tense negotiations, a first-stage "open skies" agreement has already brought the chance of more choice and cheaper tickets to passengers flying between Europe and the United States.
Since the end of March, any EU carrier can fly from anywhere in the bloc to any point in the United States, and then on to a third country, and vice versa.
With a second round of talks getting underway this week on further liberalising transatlantic air travel, the focus is now on the many European carriers who want to invest in their US counterparts.
So far the new pact has lifted restrictions on EU carriers buying majority stakes in US airlines but their voting rights in a US company will remain capped at 25 percent.
On the other hand US airlines will be able to hold voting rights of up to 49 percent in a European carrier but that figure could be scaled back down to 25 percent if there is no progress in the negotiations on further liberalisation.
Byerly warned against any expectations of a swift deal on the matter, saying the "marathon" talks could last two or three years.
Although the US side will enter the talks in Slovenia with an "open mind", it will need to be convinced of "the possible benefits to our economy and to our airlines about allowing greater capital investment in our companies," he said.
The issue is further complicated as there is a "strong emotional component" within the US Congress over national airlines on top of the economic concerns.
Add to that the role played by US carriers in transporting troops and defence cargo, and the talks look even trickier for the Europeans.
"The concept of having foreign citizens own and control US airlines opens the door to lesser security and the like," Byerly argued.
However, Byerly and his US team will be seeking to obtain supplementary rights for US freight airline, such as UPS and Federal Express.
"We want them to be able to carry cargo from Europe to other countries, not only the United States," he explained, arguing that there was a current transatlantic imbalance as European counterparts can operate freely on US soil.
Washington is also concerned about growing restrictions in Europe on night flights -- citing airports in Brussels, Frankfurt and Porto in particular -- which is another concern for express freight carriers.
"Once you start allowing night flights to be banned in one airport and another airport and another airport , it spreads," he said, adding that such decisions were being taken "before we've seen any evidence that a real cost-benefit analyses are undertaken".
He also said that EU plans to include all airlines operating in Europe in its greenhouse gas emissions trading scheme from 2012 was "unlawful," though the US side would not broach the issue in Slovenia.
"I don't think it's appropriate that Europe mandate all the world with the way it has decided it wants to do it," he said, stressing that the issue should be tackled globally through the International Civil Aviation Organisation (ICAO).
