British Airways Exec Slams EU-U.S. Talks

He described long negotiations on an air services agreement designed to bring down trade barriers as "tinkering at the edges."


Talks between the European Union and the United States on a new aviation agreement were a "disappointment," British Airways PLC Chairman Martin Broughton said Tuesday.

He described long negotiations on an air services agreement designed to bring down trade barriers as "tinkering at the edges."

EU airlines still face protectionist measures such as U.S. ownership rules and the U.S. insistence that all government workers use American carriers when they travel in Europe, he said.

"There is a real danger that we are missing an opportunity of making a clear and major statement that both Europe and the U.S. believe in the value of free trade," he said.

"Frankly it's been a disappointment," he said. "What we are getting is a muted response ... a half measure which doesn't get us where we need to go."

Broughton was in Brussels for informal talks between EU and U.S. officials and business leaders on how governments can work together to boost trade.

An "open skies" agreement would see both the EU and the United States pry open the air travel market, allowing airlines from both regions to fly to wherever they want and charge whatever they want on trans-Atlantic flights, a move that could lead to lower ticket prices for passengers.

In January, Washington is due to report how it could change airline ownership rules, a move the EU said could pave the way for a deal in early 2006 that would replace the current mix of more restrictive treaties between individual countries that have organized the industry for more than half a century.

The EU wants Washington to lift restrictions on foreign ownership of American air carriers. The U.S. administration said earlier this month it is considering giving foreign investors a say in marketing, flight routes and types of aircraft operated, which might attract foreign capital to U.S. airlines.

Under the present pacts, European airlines can fly to any U.S. airport only from airports located in their home country. For example, Germany's Lufthansa AG can only fly to the U.S. from airports based in Germany. Because of this so-called nationality clause, European airlines risk losing U.S. landing rights if they merge - which has led to fragmentation and inefficiency in the European industry.

The U.S. is seeking to pry open the most valuable global airline industry property to all of its carriers: London's Heathrow Airport, Europe's largest gateway for trans-Atlantic flights.

In June 2004, EU governments rejected a proposed deal by Washington because it didn't grant access to the U.S. domestic travel market. Britain felt this was too high a price to pay in return for granting airlines greater access to Heathrow, Europe's largest gateway for trans-Atlantic flights.

The talks resumed in October after EU governments expressed renewed willingness to reach an agreement.


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