Open Skies: EU-US Air Transport Agreement

Apple pie in the sky? Jobs threatened?

As if those employed by our air carriers did not have enough to worry about, it seems one more thing can be added to the list. You might have read the European Union (EU) aviation people are pressing to complete an Open Skies Air Transport Agreement with the United States. This has been going on since 2003. Many believe that an Open Skies agreement is nothing more than an attempt by the EU to exercise control over U.S. air carrier activities by, among other things, gaining ownership interests in our air carriers.

The EU consists of 27 countries (member states) that now have strong political clout with our government. The aviation arm of the EU wants access to our huge passenger and cargo market and more importantly, the right to buy into and control our carriers. They have achieved some of what they want so far, but not all. Think of it, Air France owning a majority stake in your employer. Outsourcing, big time!

Stage I agreement signed

The initial agreement called Stage I, was signed on April 30, 2007 by Condi Rice, secretary of state and Mary Peters, secretary of transportation and by the EU Council president and the EU VP Transport. It is planned to be effective on Oct. 28, 2007. This is the start of the winter travel season and the pact is designed to lower fares for all. (As if they are not low enough!) We’ll see. But, there are other important conditions agreed to that will affect whether or not the deal continues on at all.

The EU VP for Transport has stated: “the objective of (Stage II) negotiations will be additional traffic rights (for EU) and fewer restrictions on European ownership and control of U.S. carriers.” The EU’s intentions are stated very clearly.

The most significant issue to completing the deal in Stage II is the EU’s attempt to include an opportunity for its member states to gain a controlling interest in U.S. carriers. The ownership interest issue was removed from the original proposed deal by our State Department after much objection by our industry. Believe it or not, our State Department was agreeable to the proposal by the EU in some respects. But if it weren’t for the strong objections of our industry and the Congress our generous State Department might have come close to giving the EU what they wanted.

We should hope that our State Department does not agree to any proposal that might allow a controlling interest in our carriers to be purchased by any of the EU member states. I and many others believe it would be the end of our air carrier structure as we know it today … which seems to be the obvious intent of the EU managers.

Many believe that it is insane for our government to change the ownership rules to give foreign investors the power to make financial and control decisions that would have any possibility of shifting airline maintenance jobs, among others, to the foreign companies.

Threats by EU

Obviously, there may be advantages on both sides that would allow for a bigger and better air transport business, but the United States appears to have much to lose and not much to gain by agreeing to share ownership in its companies with failing or non-profitable EU carriers. The EU attempts to threaten our industry by saying that EU courts have declared our bilateral agreements, that define the various arrangements between the United States and many of the foreign EU member states, are illegal under their EU laws. They claim that these bilateral agreements must be set aside and replaced with the new EU drafted agreement. You can imagine what that means. Why our State Department seems to be hell-bent on marginalizing our air carriers and the people who work there, is difficult to understand. Is this part of the globalization theme running through much of our government today?

Give away our factories and manufacturing capability, our automobile industry, our machine tool manufacturing and steel industry, etc., and now our major transportation industry. Soon our country will do nothing but sell hamburgers and pizza, say some of our more caustic pundits.

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