The United States and the European Union have signed an open skies agreement that makes it easier for airlines to buy one another.
This is the second open skies agreement between the two governments. The first open skies agreement took effect in 2008 and opened up transatlantic routes to all carriers. Previously some routes were limited to specific carriers.
This new agreement will allow foreign owners to have a majority stake in an airline. Until now, European airlines could only own 25% of a US carrier, and US airlines could only own 49.9% of a European airline. The new limits have yet to be set and the move still has to be approved by Congress.
The deal also equalizes rules on emissions, fuel, and noise, and establishes a closer cooperation with the carbon trading scheme. European airlines will also now be able to fly in and out of the U.S. without first landing or taking off in the EU. Expect more services to non-EU destinations by EU airlines in the near future.
After the election of Barack Obama and a Democratic Party majority in the house and senate, British Airways CEO Willie Walsh sees little to be optimistic about as far as stateside operations go. Many European carriers would like to see additions to the Open Skies Agreement, which provided greater rights for foreign-owned airlines to operate within the US. Walsh is worried about Obama’s support of US labor groups. “I think it’s very clear Obama has taken a strong line in relation to any change in the ownership and control regulations. So at this point I would not be expecting any major progress to be made.”
Right now, foreign companies can have no more than a 25% share in US-based airlines. That is not likely to change, especially considering the weak state many airlines are currently in. With a rumored merger with American Airlines now seemingly out of the question, BA is focusing on partnering with AA to offer better trans-Atlantic service. Before going ahead with that, though, they must receive approval from US antitrust investigators.
The “open skies” agreement between the U.S. and Europe goes into effect this weekend. And for those wondering whether this deregulation measure will result in lower transatlantic fares, it seems that the answer is yes…at least for now.
It used to be that only four airlines — United, Virgin Atlantic, BA and American — could fly between the U.S. and London Heathrow. Now under “open skies,” US Airways, Delta, Northwest and Air France are jumping onto this route. And in an effort to establish some kind of position in the market, they are offering competitive fares in the $400-$600 range for travel in April and May.
Carol Sottili, the travel deal guru over at the Washington Post, blogs about the details, including specific London services now on offer from the above carriers.
For the time being, it seems that the opening up of transatlantic routes will really only benefit those heading to London. While “open skies” mean, in general, that more airlines will be able to fly to more European destinations, Sottili points out that those flights are spread out across the continent, so competition between carriers isn’t as fierce as it is with London service.
But as a hub for many budget airlines, you can still leave London for other European destinations relatively cheaply. This way, your first leg to London is now more affordable.
At some point I want to know how many more planes the sky can handle. I don’t even mean it from the perspective of the environment. I mean how many planes can we fit without sacrificing safety?
On March 30, the Open-Skies Agreement goes into effect. It will finally allow airlines based in the United States and Europe to fly across the Atlantic between any two airports in each region, NY Times reports. Before the pact, trans-Atlantic flights were governed by separate agreements between the United States and individual European nations. For example, the agreement required airlines to take off or land in their native countries, and limited which airlines could serve certain airports.
That is about to change. For the first time, the open market will dictate all trans-Atlantic routes between the United States and Europe and for example, Continental, Delta and Northwest will be able to serve Heathrow for the first time. According to OAG Back Aviation Solutions, flights from the United States to Heathrow are expected to increase 31 percent, to 2,932 flights in July from 2,233 this month. Heathrow is congested and chaotic as it is. No wonder, there are constant protests about expanding the airport. There has got to be such thing as “too many planes.”