There goes the neighborhood (cabbotage)


If specified, this will replace the title that
WASHINGTON (Reuters) -- Major issues are unlikely to be resolved, but a much clearer picture of where landmark transatlantic aviation talks are headed could emerge as U.S. and European Union negotiators resume their negotiations this week, officials from both sides said.

The talks aim to replace those bilateral treaties that predated European Union authority over aviation matters and underpin popular transatlantic code-share alliances with one sweeping platform for passenger travel and cargo service.

Proponents say liberalization, or "Open Skies," would sharpen competition, create new service and lower fares. It could also pave the way for consolidation.

Election-year politics in the United States and a cooling European reception to immediate Bush administration goals dampen expectations for a breakthrough at the State Department. But officials from both sides signal the negotiations, which began last year, have reached their first crossroads.

"We are moving into a part of the negotiations where we are discussing nitty gritty issues to see what really can be done," said a senior European Union official who requested anonymity ahead of the third-round set to run from Tuesday through Thursday.

So far U.S. officials from the state and transportation departments have been more cautious than their EU counterparts as broad initiatives favored by Brussels would require Congress to change laws or regulations that lawmakers have been reluctant to address.

"We don't expect to reach a (broad) agreement this round," said Transportation Department spokesman Bill Mosley. "We look forward to building on the foundations established in the 'Open Skies' agreements we've concluded with 11 of the 15-member states."

European governments, influenced chiefly by their flag carriers, are looking for the broadest deal possible.

They would like the United States to relax restrictions on foreign ownership of U.S. airlines, which is capped at 25 percent of voting stock. The EU also wants the United States to lift rules that prevent European carriers from flying American domestic routes.

The Bush administration may push forward side deals called "early harvest agreements" to liberalize service between the U.S. and one or more of the four EU countries not covered by "Open Skies" pacts - Ireland, Portugal, Greece and Britain.

Years of talks between the United States and Britain foundered over access to Heathrow.

The administration also favors dropping the restriction that permits foreign carriers to only operate U.S. service from their home countries. Some say lifting the so-called "nationality clause" could prompt a round of industry consolidation in Europe, creating fewer but potentially stronger airlines.

But British Airways Chief Executive Rod Eddington last week urged the EU to be patient through the U.S. election and reject partial agreements that he said would favor American carriers.

One of those potential deals would likely involve opening up Heathrow, where British Airways dominates, to more U.S. airlines.

Only two U.S. carriers, American Airlines and United Airlines, can operate direct service from Heathrow. British Airways and Virgin Atlantic are the two UK airlines that have sole U.S. rights from London's main airport.

One U.S. aviation industry source said European airlines are uniting now because they sense one or more small deals could be struck this year, which they believe would weaken their position on full liberalization.

"Optimism has grown in this country that an agreement is possible, but the Europeans and their carriers seem to be pushing back a little bit. They don't want a deal this year," the source, a former "Open Skies" negotiator, said.

EU and U.S. officials also note the critical timing of the this round - just weeks before EU transport ministers are scheduled to meet and formally review the European position and gauge the progress of talks.

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So does this mean I'll get to fly no-frills service on a Vietnam Air C-47 from TUS to LAS for $19 one-way?
The way I see it, Open Skies is a Bad Idea right now. Maybe 20 years in the future when the US airlines have either gone TU or have gotten stronger, but not now. If the cabotage rules were repealed, the European carriers would eat us alive. Their route structures are much more profitable, and they already have established international agreements that they could build on. Then the NAFTA of the Skies would see American pilot jobs replaced by foreign carriers w/ their own pilots. Granted, if a lot of the foreign carriers would slack on their reqs for hiring, that could be avoided. Several things would happen in that scenario: pilot salaries MIGHT stabilize, but ticket prices would probably go up, and all that $$$ would go under another country's GDP, not ours.
So does this mean I'll get to fly no-frills service on a Vietnam Air C-47 from TUS to LAS for $19 one-way?

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Time to break out the ole scare the public tactics.

Tell 'em that if open skies goes through, they'll be flying on a plane operated by a guy from Korea or Africa. Tell 'em that the aircraft will be based out of Tanzania or Vietnam.

Don't mention to them that the folks flying the planes will have to meet FAA standards and so will the aircraft.

Watch the plan die.