EU Wants to Start 'Open Air' Talks with Canada

Jan. 9, 2007
An 'open skies' deal with Canada would free up market restrictions and set regulatory standards for safety and security and it will replace 17 bilateral air services agreements between Canada and EU nations.

The European Union wants to start talks with Canada on an aviation deal that could cut fares and create more jobs, the European Commission said Tuesday. It meets U.S. officials this week on a similar deal that has stalled.

An 'open skies' deal with Canada would free up market restrictions and set regulatory standards for safety and security, the EU executive said.

It will replace 17 bilateral air services agreements between Canada and EU nations in line with a 2002 court ruling that said an EU pact must take over from individual deals, "restoring legal certainty" for airlines, the commission said.

"An open aviation area may generate consumer benefits of at least euro72 million (US$94 million) through lower fares and could create 3,700 jobs in the first year," the EU said.

Air traffic between Canada and the 27-nation bloc doubled between 2000 and 2005.

The EU executive needs the backing of EU governments to launch negotiations.

It already has their support to strike a deal with the U.S. on a similar aviation pact that seems in doubt after Washington last month yanked a proposal to lift limits on foreign ownership of U.S. carriers, one of the EU's main demands to open up the air market in both regions.

Air travel in Europe and the United States accounts for 60 percent of global air traffic. Analysts say an EU-U.S. open skies deal could allow more airlines to fly the lucrative trans-Atlantic routes, paving the way for cheaper air tickets between New York and Paris.

An American delegation - led by Deputy Assistant Secretary of State for Transportation Affairs John Byerly - will meet EU officials in Brussels on Wednesday and Thursday to see if a less ambitious deal can still be signed in the absence of a reform to U.S. airline ownership rules.

He told reporters the U.S. was still keen to take what was negotiated in November 2005 and wanted to see what the Europeans were asking for.

"It's an agreement we need," he said. "Europe, however, continues to have reservations about moving ahead."

"It is necessary now, on both sides of the Atlantic to accept the reality, that a major change to U.S. rules governing control of U.S. airlines is not on the cards, certainly not in the near term," he said, citing opposition to White House plans from labor unions, "at least one major carrier" - Continental Airlines Inc. - and both Republicans and Democrats.

Talks were unlikely to cover new ground after 3 1/2 years of haggling, he said.

EU transport spokesman Michele Cercone said it was premature to comment on the meeting but said the U.S. had requested it and the Europeans would wait to hear what Washington's intentions are after failing to change the rules that limit foreign ownership to 25 percent.

Byerly said this week's talks would not touch on EU proposals for all airlines - including U.S. carriers - to trade carbon emissions from 2012, repeating Washington's belief that it would break an international aviation agreement, the Chicago convention, and bilateral air services deals.

"It's unworkable and unlawful if implemented," he said, adding that there was a legal precedent for the U.S. to sue the EU but the Americans were currently focused on "avoiding taking that decision."

EU environment spokeswoman Barbara Helfferich reiterated the EU executive's view that their proposal is fully in line with international law.

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