ANother
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Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 1:55 am

See: http://www.dpm.ae/doc_cont.asp?id=93963

Quote:
Continental Airlines Welcomes Senate Appropriations Committee Vote Blocking Foreign Control of U.S. Airlines

WASHINGTON, -- Continental Airlines (NYSE:CAL) today released the following statement from Jeff Smisek, president of the company, in response to the Senate Appropriations Committee vote on the Transportation, Treasury, Housing and Urban Development Appropriations bill for FY 2007:

"Continental welcomes the Senate Appropriations Committee's action to block the Department of Transportation from implementing its flawed rulemaking on foreign control of U.S. airlines.

"Today the Senate Appropriations Committee voted three to one to prohibit the Department of Transportation from using appropriated funds to finalize or implement its proposed rulemaking on foreign control, just as the House did, voting two to one, in June.

"Both the Senate and the House have expressed strong bipartisan opposition to DOT's rulemaking proposal, which would unlawfully give foreign investors the right to control U.S. airlines. The message has never been clearer that Congress will stop the Department of Transportation from implementing its foreign control rulemaking."

The next step IMHO will be for the EC to direct their 'offending' member states to tear up their open skies agreements with the US, as they are not in compliance with EU law. Should be an interesting decade before we get this sorted. Ironic that Bermuda II won't be one of these, because it was ratified before the EU had jurisdiction.

I still don't understand why the US simply cannot agree to reduce (or eliminate) their ownership and control rules. (and please don't flame me with 'National Security issues', the US moves so many troops around that any company - US or non-US would be happy with the business). This IS free enterprise, isn't it. P.S. this would actually mean more jobs, rather than fewer too.

[Edited 2006-07-23 18:59:12]
 
positiverate
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 2:07 am

Quoting ANother (Thread starter):
I still don't understand why the US simply cannot agree to reduce (or eliminate) their ownership and control rules. (and please don't flame me with 'National Security issues', the US moves so many troops around that any company - US or non-US would be happy with the business). This IS free enterprise, isn't it. P.S. this would actually mean more jobs, rather than fewer too.

CO has always marched to their own beat when it comes to things like this. Their objection to open skies was that they would be the only airline without access to Heathrow, as they do not have anyone who is willing to transfer slots. They also tied to Open Skies debate to foreign ownership, and convinced a fair number of Members of Congress that allowing EU Open Skies to go through would 1) be a vote in favor of Virgin America's operating certificate and 2) not be good for national security. There was a great National Journal article on this a few weeks ago. They played on the Dubai Ports fears, aeven though this debate has nothing to do with ownership percentage and instead relaxes the rules with regards to marketing, etc. CO's VP of government affairs is married to a former Congressman.

On the flip side, DL, NW, and UA all lobbied actively in favor of open skies. AA was silent on the issue.
 
airways45
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 2:36 am

Two comments.

Firstly, could Continental be so vocal in all of this because they would be the first target of a take-over? Could be a case of management fighting for their jobs.


Secondly, ironic how CO DOES have access to LHR via their Virgin Atlantic codeshare. So, interesting how they are so against Virgin America when they have a commercial arrangement with Virgin Atlantic.

Who needs enemies, when you have friends like CO!

Airways45
 
EWRCabincrew
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 2:41 am

Quoting Airways45 (Reply 2):
Firstly, could Continental be so vocal in all of this because they would be the first target of a take-over?

Hardly a first target. Only rumors are circulating. Just rumors.

Quoting Airways45 (Reply 2):
Secondly, ironic how CO DOES have access to LHR via their Virgin Atlantic codeshare.

That's just the point. It is only by code share. CO wants its own metal at LHR, as does, I am sure, DL, NW and US.
You can't cure stupid
 
DLPMMM
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:00 am

Quoting ANother (Thread starter):
The next step IMHO will be for the EC to direct their 'offending' member states to tear up their open skies agreements with the US, as they are not in compliance with EU law. Should be an interesting decade before we get this sorted. Ironic that Bermuda II won't be one of these, because it was ratified before the EU had jurisdiction.

While it may be YHO, I think you are sorely mistaken about the ramifications. I predict that the current open skies agreements will continue in force as the EU and the USA continue negotiations. This is all much ado about nothing.

Someday, the EU and the USA might reach an agreement on an open skies agreement. This is all just bureaucratic politics and of no major consequence.

The EU mamber states and airlines have as much (or more) at risk as the USA and airlines.
 
dutchjet
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:02 am

Quoting Airways45 (Reply 2):
Firstly, could Continental be so vocal in all of this because they would be the first target of a take-over? Could be a case of management fighting for their jobs.

Its been rumored......if foreign carriers were to invest into US carriers, CO would certainly be a good choice due to its reasonable financial position, young fleet and good route network. CO has been very outspoken on this issue, I dont think its manangement protecting their jobs as much as CO would very much like to get into LHR.

Quoting Airways45 (Reply 2):
Secondly, ironic how CO DOES have access to LHR via their Virgin Atlantic codeshare. So, interesting how they are so against Virgin America when they have a commercial arrangement with Virgin Atlantic.

Thats nonsense, CO wants to fly CO airplanes into LHR. you know that! And being that we have been brainwashed that Virgin America has nothing to do with Virgin Atlantic......whats the point?  Smile

Quoting ANother (Thread starter):
The next step IMHO will be for the EC to direct their 'offending' member states to tear up their open skies agreements with the US, as they are not in compliance with EU law. Should be an interesting decade before we get this sorted. Ironic that Bermuda II won't be one of these, because it was ratified before the EU had jurisdiction.

You are making a HUGE jump....this is not happening.
 
ANother
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:08 am

Quoting Positiverate (Reply 1):

CO has always marched to their own beat when it comes to things like this.

I didn't intend to bad-mouth CO, in the quoted article they were 'supporting' actions of Congress. While they may have attempted to influence them, the bottom line is Congress is saying NO NO NO to the DOT's very limited relaxation of the rules. While the DOT changes were cosmetic, at best, some thought it would be enough to move the European governments on this issue. That simply isn't going to happen now.

What will happen now, from an intra-EU perspective will be a move to force a relaxation from the US side. The fact that no EU airline gives a 'mickey' about changes here is irrelevant - this is now a political issue and the Eurocrats have to save 'face'. It's going to be an interesting few months ... years ...
 
EWRCabincrew
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:14 am

Quoting ANother (Reply 6):
I didn't intend to bad-mouth CO, in the quoted article they were 'supporting' actions of Congress.

I know there was no intent to bad mouth CO. CO just wants their own metal to LHR. CO wants access. It's an argument that will not stop till it is over, which may be a while. One thing CO does is fly heavily into the UK. I believe we fly to more places in the UK than any other US carrier (I am sure there will be more to come soon).

LHR would be a gem in its UK crown.
You can't cure stupid
 
ANother
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:22 am

Quoting ANother (Reply 6):
You are making a HUGE jump....this is not happening.

Absolutely correct - nothing has happened yet. But any action would not necessarily be in the best interests of the Member States, or of airlines based in the EU - this will be perceived as a slap in the face by the Eurocrats in Brussels. Hell hath no fury like an Eurocrat scorned!

This is of course a worst-case scenario, one that I certainly hope doesn't happen. But it may ... Don't forget that the ECJ has already determined that the open skies agreements contravene European law. The Member States has delegated their negotiation authority over to the EC to sort out the problem. The EC has few options here. If they do nothing, the MSs will say 'told you so', so they have to do something. What? Who knows.
 
CXA330300
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:27 am

Isn't it rather hypocritical of CO to be pushing this considering it was an investment by SK that staved off collapse 16 years ago?

Considering their ownership of CM......hmm..........
AC/AA/UA/DL/B6/WN/US*/CO*/FI/BA/IB/AF/SK/LX/Sabena*/TK/LY/SA/MN/SW/AM/CE*/CX/CA/MU/JL/SQ/TG/MH/KA/5J
 
ArtieFufkin
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:30 am

Quoting ANother (Thread starter):
I still don't understand why the US simply cannot agree to reduce (or eliminate) their ownership

Why is it so important or desirable for Europeans to own US airlines?
 
EWRCabincrew
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:31 am

Quoting CXA330300 (Reply 9):
Considering their ownership of CM......hmm..........

Apples and oranges. CO's investment in CM has nothing to do with wanting access to LHR.
You can't cure stupid
 
dutchjet
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:32 am

Quoting CXA330300 (Reply 9):
Isn't it rather hypocritical of CO to be pushing this considering it was an investment by SK that staved off collapse 16 years ago?

All done within the law.......nothing hypocritical, although SAS wasnt too happy as to how that deal worked out.

Quoting CXA330300 (Reply 9):
Considering their ownership of CM......hmm..........

CO has sold off most of its interest in CM (which was done within the limits of Panamian law, by the way) to pay some pension obligations.
 
EWRCabincrew
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:36 am

Quoting Dutchjet (Reply 12):
although SAS wasnt too happy as to how that deal worked out.

Not in the least. We refered to SAS as Sorry And Stupid for dealing with us. Who knew what was to become of CO now...

[Edited 2006-07-23 20:37:08]
You can't cure stupid
 
ArtieFufkin
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 3:40 am

Call me cynical.

If I was in charge of Country A, which had higher costs and is not so much concerned about low costs for consumers because they have other priorities such as jobs, and Country B was across the Atlantic, had much lower costs, and, didn't care about jobs, and let free markets reign.

How would I negotiate with them?

Would I admit to my own consumers we dont care about high ticket prices? No, I would just simply ask for something that I know Country B will not give up, ...ownership rules.

I don't really care about ownership rules other than I can use it as an excuse not to open up the markets.

And this is no knock on the EU by the way. I have no problem with putting limitations on free markets.

[Edited 2006-07-23 20:42:06]
 
exFATboy
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:21 am

I don't think that this Congressional action necessarialy means the end of the negotiations for Open Skies - the US and EU could reach an Open Skies agreement without changing the ownership restrictions. CO's position seems to be that they are going to oppose any change in the US-EU airline relationship until they get their metal into LHR, but CO seems to be the only US carrier openly taking this position, and linking...well, everything in the US-EU relationship...together.

Quoting CXA330300 (Reply 9):
Isn't it rather hypocritical of CO to be pushing this considering it was an investment by SK that staved off collapse 16 years ago?

Not really - US law allows a 25% financial stake, as long as effective day-to-day control over the airline does not pass to the foreign investor. The CO/SK deal was perfectly legal. CO doesn't oppose minority foreign ownership, but - as do other parties in the debate - worries that even though the Virgin America structure complies on paper with the current rules, SRB and his team will have marketing control, and Virgin America will be marketed as a part of the Virgin Group. I think it's a red herring, personally, as is the whole "foreign ownership could interfere with the air fleet use in wartime" argument - this whole problem could simply be solved by Congress making it clear that all airliners operated under a US certificate are subject to wartime use, and if an airline didn't cooperate, its planes would simply be operated by USAF/ANG/AF Reserve pilots in time of war.

Quoting ANother (Reply 8):
Don't forget that the ECJ has already determined that the open skies agreements contravene European law. The Member States has delegated their negotiation authority over to the EC to sort out the problem. The EC has few options here.

One option could be to just get out of the way and devolve this authority back to the member states. I know that goes against the EC philosophy, but in this case might be the best way to handle it. It could also keep the ownership and Open Skies issues separated - the convulutions of Bermuda II might delay US-UK Open Skies for a while, but the US could probably reach ownership agreements with countries we either have a very close military relationship with (the UK) or, conversely, have no military relationship with at all (e.g. Ireland), faster than countries that we seem to have trouble cooperating with sometimes even though we're allies (guess who.)

I do find myself wondering if this could eventually affect the relationship between CO and VS - if I were SRB, I'd be wondering if I might be able to find a better relationship with another US partner. It's probably not too late to change the gate designs for the new JFK T5 to allow for 747s...  Silly
 
airways45
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:23 am

So, how is CO's actions allowing it access into LHR? It is likely to have the opposite action.

I don't see how CO complaining about ownership restrictions is going to help its cause.

Someone explain how CO's actions will help it get LHR access?

If CO is successful in its lobbying, then I imaginewe can all kiss goodbye to open skies...


Airways45
 
Alitalia744
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:29 am

Quoting EWRCabincrew (Reply 3):
That's just the point. It is only by code share. CO wants its own metal at LHR, as does, I am sure, DL, NW and US.

If CO wants to fly into LHR then they should find a way to acquire slots in a similar fashion that other airlines would be required to.

I know AF has already indicated they would help DL secure the necessary slots to allow service to both JFK and ATL, perhaps CO should look for something similar?
Some see lines, others see between the lines.
 
ANother
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:33 am

Quoting ArtieFufkin (Reply 10):
Why is it so important or desirable for Europeans to own US airlines?

It isn't. It's the Aeropolitical need for the EU to have done 'better' than any individual Member State in negotiating with the US. No EU airline wants it. US airlines have more to fear from their current stockholders asking why their return is so low.

Why is it so important or desireable for the US not to relax, or do away with their ownership and control rules? As a Canadian, living in Switzerland I am free to invest in just about any US business, but not the airlines. I can buy your ports, your airports, your biggest buildings, but not your airlines. Why? You too can buy just about anything you want in Switzerland (although land would be challenging) but an airline - again why?

Economic matters; ownership and control, route rights, etc. should be free for airlines to exploit in the free market.
 
kaitak
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:36 am

I think you're seeing a lot of positioning and grandstanding now, ahead of elections in November. I think that once that's out of the way, there will be a more logical and less emotional approach. It's unfortunate timing, but I think we will ultimately see Open Skies; ironically, it was the US's idea and it is a very good idea. It would be a shame to see it die. Of course, there are issues that need to be ironed out, but the irony is that the two "deal breakers" - ownership of US carriers and US access to LHR - are the ones which caused the last talks to founder and probably the next one(s) after this.

It's not just CO causing problems either; those UK and US carriers - particularly BA - which have access to LHR are seriously peeved at the prospect of so much competition, so they're angrily lobbying against it and no doubt revelling in the US Congress's blocking of moves towards liberalisation.

The problem is that these two small problems, which affect only a handful of airlines and one airport are holding everyone else up. We in Ireland have been putting up with the damned Shannon stopover issue for years; we gave the right to negotiate to the EU (not that we had much choice), only to find that they were bringing more problems to bear, so we're stuck. What happens now? Can individual EU countries liberalise outside the context of EU/US? If the EU does ask individual member states to scrap their bilaterals (and not just the Open Skies ones), what then? What will take their place? I appreciate that the current problem is largely an American domestic one, but the EU does pose its own problems.
 
dutchjet
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:36 am

Quoting Alitalia744 (Reply 17):
If CO wants to fly into LHR then they should find a way to acquire slots in a similar fashion that other airlines would be required to.

You realize that the slots are not the issue......finding well timed slots will be a difficult and expensive proposition for CO even with the possible help of its SkyTeam partners but CO will overcome that issue by writing out a very big cheque.......the issue is that CO (nor any American carrier other than UA and AA) are premitted to operate in and out of LHR under the terms of Bermuda 2. First CO (and the others) must be allowed into LHR, then the search for slots.
 
ANother
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:40 am

Quoting ExFATboy (Reply 15):
the convulutions of Bermuda II might delay US-UK Open Skies for a while,

The Brits, over the years have proved to be very hard bargainers (why else would you have the restrictive covenants of Bermuda II).

So who would you rather bargain with - the wimps in Brussels who only are asking for a few token gestures, or with the Brits?

Open skies are on the table to be taken by the US side (including unlimited 5ths within the EU) all they have to do is to give a token gesture - which, at worst, will help US airlines.

Case studies will be studied in collages for the next century about how stupid both sides are. And for CO? Well having rights but crappy slots is better than having no rights at all (LHR). The slot exchange barter/buy procedure may not be inexpensive, but it's got to be better than having no rights at all.
 
Alitalia744
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:47 am

Quoting Dutchjet (Reply 20):
You realize that the slots are not the issue......finding well timed slots will be a difficult and expensive proposition for CO even with the possible help of its SkyTeam partners but CO will overcome that issue by writing out a very big cheque.......the issue is that CO (nor any American carrier other than UA and AA) are premitted to operate in and out of LHR under the terms of Bermuda 2. First CO (and the others) must be allowed into LHR, then the search for slots.

Yes I realize, but thanks again.

I'm saying if the bi-lateral (ie Bermuda II) is changed to allow additional carriers onto the route.

IF that happens, then CO should look to find slots in a similar way that other US carriers will, either by obtaining non-ideal time slots, or by obtaining them via purchase from another SkyTeam carrier willing to give part with them.

DL has already made arrangements with AF in the event B2 changes.
Some see lines, others see between the lines.
 
dutchjet
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:49 am

Quoting ANother (Reply 21):
QUOTE

I agree with your last post......one big issue has been taken off the table, the idea that foreign carriers could operate domestic segments in the US (cabotage)......I think that a compromise will be reached at some point, who knows when?

Do consider that:

The UK (read Virgin and BA) really do not want the additional US carriers at LHR.

The US (read the US airlines....CO is talking but they are effectively speaking for the industry) would rather not become "subsidiaries" of foreign carriers....the 25% is one thing since there is not a control issue. (I am too lazy to do the effective control legal analaysis, but 25% is one thing, 49% or more is another).

Who will blink first? Time will tell.....there must be a compromise somewhere.
 
worldtraveler
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 4:57 am

The EU has missed their opportunity to gain advantage from Open Skies.

The EU wants Open Skies for 2 reasons:

1. To allow weaker European carriers to be bought by stronger carriers from other EU countries while still retaining the failing carrier's rights to fly to the US. Under current US law, rights to fly between the US and European countries are held in the name of a specific country, not the EU.

2. The EU wanted to gain a larger piece of the large US market at a time when US carriers were failing.

Although there are still a couple weak Euro airlines, it is now just as possible for US airlines to buy into Euro airlines as it is for one Euro airline to buy another. US airlines are lower cost and more efficient meaning that investors would be more likely to favor an investment or partnership between a Euro and US airline over 2 average Euro airlines because the partnership involving a US airline would probably yield a higher return on the investment than one involving 2 average network Euro airlines.

US airlines have largely turned the corner and are likely to restructure without foreign help. The EU lost its opportunity to buy into the US industry inexpensively and at a time when US airlines were down for the count.

In addition to the reasons above, CO also has an interest in protecting its route system which does include service to many relatively small European cities which could be jeopardized if someone like BA had the ability to deploy 757s on flights nonstop from continental Europe to the US. CO also has some of the choicest routes to LGW and would likely lose some of its market power if other carriers were given greater access to London since the Europeans have linked greater foreign ownership in US airlines to increased London access.

Air transportation will probably be one industry in which US airlines will gain a substantially stronger position in the coming decade than they have in the past. US airlines now have much lower costs and the ability to fly anywhere from the US to the EU regardless of the strength of the airline in each EU country.

It is doubtful that the EU will follow through with trying to abrogate Open Skies agreements because it will cause the US to disapprove some of the alliances and antitrust immunities that the US approved only on the condition of Open Skies. Without alliances, European airlines would be more harmed that would US airlines because the US airlines can access more of the EU than can EU airlines access the US.
 
masseybrown
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 5:16 am

Quoting Dutchjet (Reply 23):
(I am too lazy to do the effective control legal analaysis, but 25% is one thing, 49% or more is another).

If the law is still what I learned a century ago, the owner of 28% or more (I believe that is the right amount) has the right to compel the company to buy him out in certain circumstances. These owners can effectively block certain management actions using the "buy me out" threat. The actions they can block are generally those affecting the equity part of the balance sheet. It's a pretty big stick in an industry that is constantly seeking new financing.
 
BA787
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 5:25 am

Quoting Positiverate (Reply 1):
AA was silent on the issue

Probably due to the OW links it has into LHR, why operate a flight out of LHR when BA passengers fly into JFK and quite often travel AA to their final destination

Quoting Airways45 (Reply 2):
Who needs enemies, when you have friends like CO!

They will not want VS to work with VirginAm because that would compromise their deal with VS and might mean that VS no longer needed them, especially if VirgiNAm is a hit (IATA code for VirAm?).

Like someone else has said, CO really want to fly into LHR with their own aircraft.

Do AA operate any services to LHR?

Tom
 
JGPH1A
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 5:39 am

Quoting BA787 (Reply 26):
Do AA operate any services to LHR?

Um yes - they operate rather a lot, multiple dailies to JFK, BOS, LAX, ORD, MIA
Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
BA787
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 5:41 am

Quoting JGPH1A (Reply 27):
Um yes - they operate rather a lot, multiple dailies to JFK, BOS, LAX, ORD, MIA

I didnt think they were allowed to operate to JFK under the Bermuda 2 agreement
 
atmx2000
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 5:41 am

Quoting ANother (Reply 21):

The Brits, over the years have proved to be very hard bargainers (why else would you have the restrictive covenants of Bermuda II).

The Brits were hard bargainers, but their airlines had less marketshare at the time, and the US didn't want to upset things (business for US airlines and geopolitical considerations) too much so they negotiated. Now the situation has reversed and the US airlines have less marketshare. But unless the US is willing to renounce Bermuda II like the Brits were, nothing will change. I also think there was some quid pro quo regarding Boeing orders by BA and RR engines going on Boeing planes at the same time Bermuda II was neogotiated in the late 70s and that might be why their hasn't been a renouncement, but I have no evidence to support either supposition. Perhaps if BA orders Airbus widebodies, an incentive not to renounce will be taken of the plate.

Quoting WorldTraveler (Reply 24):
2. The EU wanted to gain a larger piece of the large US market at a time when US carriers were failing.

I suspect this too. When European carriers were in a lousy state early in the last decade, they were still heavily protected by their governments.

Quoting ANother (Reply 6):
What will happen now, from an intra-EU perspective will be a move to force a relaxation from the US side. The fact that no EU airline gives a 'mickey' about changes here is irrelevant - this is now a political issue and the Eurocrats have to save 'face'. It's going to be an interesting few months ... years ...



Quoting WorldTraveler (Reply 24):
It is doubtful that the EU will follow through with trying to abrogate Open Skies agreements because it will cause the US to disapprove some of the alliances and antitrust immunities that the US approved only on the condition of Open Skies. Without alliances, European airlines would be more harmed that would US airlines because the US airlines can access more of the EU than can EU airlines access the US.

European airlines benefit greatly from the ability to carry 6th freedom traffic from the US to destinations beyond Europe, more so than US airlines benefit from the ability to carry 6th freedom traffic through the US to elsewhere. And 5th freedom rights are hard to take advantage of in any significant way due to slot availability at major EU airports and language issues. If the EU tries to do anything, they will lose frequencies and routes to the US, which will impair EU airlines ability to carry 6th freedom traffic.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
OH-LGA
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 5:58 am

Quoting BA787 (Reply 28):
I didnt think they were allowed to operate to JFK under the Bermuda 2 agreement

The Bermuda II agreement dictates the two airlines each from the US and the UK that are allowed to fly between London/Heathrow and the US, and it also dictates the US gateways that can be served from London/Heathrow. AA & UA are the US carriers, and they are not barred from serving specific airports unless they are not included in the Bermuda II agreement. AA could start operating SFO-LHR if they so desired (barring slot availability at LHR), for example.

AA, btw, operates 6x daily on the JFK-LHR run.
Head in the clouds... yet feet planted firmly on the ground.
 
F14ATomcat
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 6:15 am

Mr. Moderator this has every appearance of a flame bait thread. Please fix or let us respond in kind. Savy?
 
flydreamliner
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 6:45 am

Quoting ANother (Thread starter):
I still don't understand why the US simply cannot agree to reduce (or eliminate) their ownership and control rules. (and please don't flame me with 'National Security issues', the US moves so many troops around that any company - US or non-US would be happy with the business). This IS free enterprise, isn't it. P.S. this would actually mean more jobs, rather than fewer too.

Ok, you let those EU nations cancel those open skies agreements. Sure would be an expensive point for them to make.

From CO's point of view, if they can keep foreign carriers from getting into their markets and getting in their routes, that's good, and if they can buy themselves a bargaining chip with this, that's good for them too.
"Let the world change you, and you can change the world"
 
halls120
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 7:15 am

Quoting ANother (Reply 18):
Why is it so important or desireable for the US not to relax, or do away with their ownership and control rules? As a Canadian, living in Switzerland I am free to invest in just about any US business, but not the airlines. I can buy your ports, your airports, your biggest buildings, but not your airlines. Why?

You also can't buy a majority stake in a company operating US flag vessels that are documented under US law. Not that there are many, but......

You can thank the the AFL-CIO and democrats in the House for opposing the administration's efforts loosen the rules regarding foreign ownership.

Some of the people that oppose this move have the most ridiculous arguments. Here are three of the most popular, and the ground truth for each.

Myth: We Need US Carriers for National Security

Reality: False. The Civil Reserve Air Fleet (CRAF) would apply equally to any US based, US incorporated airline, no matter where the shareholders were based, because a US corporation is bound by US laws, no matter who or where its shareholders are based.

Myth: Foreign Airlines Don't Have the Same Security and Safety Standards
Reality: False. Even if it were true, so what? A foreign owned US airline would be subject to all US regulations and controls.

Myth: Foreign Airlines Would Take Away Jobs from Americans
Reality: False. A US based carrier is subject to the same laws for who it can employ, no matter who its owners might be. All US carriers have to employ either lawfully admitted foreign nationals on special work visas, or US permanent residents, and indeed, for some jobs, they can only employ full US citizens.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
positiverate
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 7:21 am

Just so we're all clear on what the NPRM DOT released was: The new rules are intended to preserve statutory requirements that a foreign investor's voting power be limited to one-fourth of a U.S. airline's stock, and that its representation on the U.S. airline's board of directors or top management be no more than one-third. But within those limits, the foreign entity would be allowed to take control of virtually any and all purely commercial decisions, reserving only safety, security and national defense--participation in the Civil Reserve Air Fleet (CRAF)--for U.S. citizens' control.

Quoting Dutchjet (Reply 5):
Quoting Airways45 (Reply 2):
Secondly, ironic how CO DOES have access to LHR via their Virgin Atlantic codeshare. So, interesting how they are so against Virgin America when they have a commercial arrangement with Virgin Atlantic.

Thats nonsense, CO wants to fly CO airplanes into LHR. you know that! And being that we have been brainwashed that Virgin America has nothing to do with Virgin Atlantic......whats the point?

That ISN'T nonsense. The point still stands: they could do what DL and NW would do, and that is pay AF and KLM to transfer LHR slots over to them.

Quoting ANother (Reply 6):
Quoting Positiverate (Reply 1):

CO has always marched to their own beat when it comes to things like this.

I didn't intend to bad-mouth CO, in the quoted article they were 'supporting' actions of Congress. While they may have attempted to influence them, the bottom line is Congress is saying . While the DOT changes were cosmetic, at best, some thought it would be enough to move the European governments on this issue. That simply isn't going to happen now.

I wasn't badmouthing CO either. I was pointing out that, on Capitol Hill, when the ATA (Air Transport Association) and its member airlines are pushing on one direction, CO has a tendency to push in the other direction. They did it on pension reform recently, and they did it here.

And Congress hasn't said "NO NO NO to the DOT's very limited relaxation of the rules", two Congresional Committees have. The whole of the US House and US Senate have yet to vote on this matter. Ther is a big difference.

Quoting EWRCabincrew (Reply 7):
I know there was no intent to bad mouth CO. CO just wants their own metal to LHR. CO wants access. It's an argument that will not stop till it is over, which may be a while. One thing CO does is fly heavily into the UK. I believe we fly to more places in the UK than any other US carrier (I am sure there will be more to come soon).

LHR would be a gem in its UK crown.

If CO wants LHR badly enough, then they should be willing to pay for the slots like everyone else is willing to.

Quoting ANother (Reply 6):
What will happen now, from an intra-EU perspective will be a move to force a relaxation from the US side. The fact that no EU airline gives a 'mickey' about changes here is irrelevant - this is now a political issue and the Eurocrats have to save 'face'. It's going to be an interesting few months ... years ...



Quoting ANother (Reply 8):
Absolutely correct - nothing has happened yet. But any action would not necessarily be in the best interests of the Member States, or of airlines based in the EU - this will be perceived as a slap in the face by the Eurocrats in Brussels. Hell hath no fury like an Eurocrat scorned!

This is of course a worst-case scenario, one that I certainly hope doesn't happen. But it may ... Don't forget that the ECJ has already determined that the open skies agreements contravene European law. The Member States has delegated their negotiation authority over to the EC to sort out the problem. The EC has few options here. If they do nothing, the MSs will say 'told you so', so they have to do something. What? Who knows.

The sky is falling..the sky is falling. The EU is not going to start a trade war over this. No one cares that much about it.

Quoting Alitalia744 (Reply 17):
If CO wants to fly into LHR then they should find a way to acquire slots in a similar fashion that other airlines would be required to.

I know AF has already indicated they would help DL secure the necessary slots to allow service to both JFK and ATL, perhaps CO should look for something similar?



Quoting Alitalia744 (Reply 22):
DL has already made arrangements with AF in the event B2 changes.

 checkmark 

Quoting EWRCabincrew (Reply 11):
Apples and oranges. CO's investment in CM has nothing to do with wanting access to LHR.

It has nothing to do with LHR, but it certainly points out their hypocrisy from a policy standpoint on this issue.
 
EWRCabincrew
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 8:32 am

Quoting Positiverate (Reply 34):
If CO wants LHR badly enough, then they should be willing to pay for the slots like everyone else is willing to.

Correct me if I am wrong here, CO cannot just "pay" to get a slot into LHR. Only two US carriers (UA and AA) are allowed to fly to LHR from the US. No amount of money would get us a slot. If that were the case, we would have been in a while ago.

Quoting Alitalia744 (Reply 22):
DL has already made arrangements with AF in the event B2 changes.

The premise that DL is arranging a slot from AF to get into LHR should tell you that you cannot just simply pay your way into LHR.

Quoting Alitalia744 (Reply 22):
IF that happens, then CO should look to find slots in a similar way that other US carriers will, either by obtaining non-ideal time slots, or by obtaining them via purchase from another SkyTeam carrier willing to give part with them.

When LHR opens up, CO will obtain its slots to LHR just like DL, NW and US will. The only thing in the way is fact we cannot. No matter what CO offers.
You can't cure stupid
 
jacobin777
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 8:41 am

As far as CO is concerned, I see this more of a problem with Bermuda-II rather than Open Skies agreement....if Open SKies and Bermuda-II fall under jurisdictions, one might not the former changed to have the latter changed....

Quoting BA787 (Reply 26):
Do AA operate any services to LHR?

IIRC, after the "local" carriers-BA, VS, BD, I think AA have one of the largest amounts of slots at LHR from a foreign country...

6x/daily JFK-LHR
5x/daily ORD-LHR
2x/daily LAX-LHR
2x/daily BOS-LHR
1x/daily MIA-LHR

for a total of 16 daily USA-LHR

2x/daily DFW-LGW
1x/daily RDU-LGW

some frequencies such as LAX-LHR and ORD-LHR are cut by a flight during the winter..
"Up the Irons!"
 
masseybrown
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 2:17 pm

Quoting EWRCabincrew (Reply 35):
When LHR opens up, CO will obtain its slots to LHR just like DL, NW and US will. The only thing in the way is fact we cannot. No matter what CO offers.

If open skies came along, CO could buy effective control of Malev cheaper than they could buy 2 slots at Heathrow ... and Malev controls 2 slots at Heathrow - which slots happen to be at more or less useful times for flights to Houston. That's one example of how CO could get into LHR.
 
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autothrust
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 6:03 pm

Quoting ANother (Thread starter):
I still don't understand why the US simply cannot agree to reduce (or eliminate) their ownership and control rules.

This kind of protectionism is just an embarrassment for every country practicing it. In a true democracy there isn't place for that.
I mean every country doing that example: France,Russia etc..

Quoting ANother (Reply 33):
Why is it so important or desireable for the US not to relax, or do away with their ownership and control rules? As a Canadian, living in Switzerland I am free to invest in just about any US business, but not the airlines. I can buy your ports, your airports, your biggest buildings, but not your airlines. Why?

2 Words:Nationalism and Protectionism
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BA787
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 6:18 pm

Quoting OH-LGA (Reply 30):

Sorry, I wasn't awake properly

Tom
 
worldtraveler
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 9:28 pm

Quoting Atmx2000 (Reply 29):
European airlines benefit greatly from the ability to carry 6th freedom traffic from the US to destinations beyond Europe, more so than US airlines benefit from the ability to carry 6th freedom traffic through the US to elsewhere.

European airlines benefit by alliances with US carriers that carry traffic on their system to interior points in the United States, not to points beyond the United States. You are right there are very few destinations beyond the US that European airlines carry traffic to and there are many more destinations beyond Europe where European carriers carry traffic. The real gold mine is the US domestic market and alliances are the best way for European airlines to access that market by dumping lots of capacity into US gateways and allowing a US partner to distribute the traffic. Without alliances, BA’s traffic into interior portions of the US could well end up on JetBlue or DL, both of which serve more domestic cites from JFK than BA’s partner AA does, for example.

It is because CO and DL want to dominate the Atlantic that they have very strong partnerships with multiple European carriers AND is further developing its own route network to serve as many destinations in and beyond Europe; DL to a better degree than CO. They will win regardless of how the game is played.
 
positiverate
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 10:21 pm

Quoting EWRCabincrew (Reply 35):
Quoting Positiverate (Reply 34):
If CO wants LHR badly enough, then they should be willing to pay for the slots like everyone else is willing to.

Correct me if I am wrong here, CO cannot just "pay" to get a slot into LHR. Only two US carriers (UA and AA) are allowed to fly to LHR from the US. No amount of money would get us a slot. If that were the case, we would have been in a while ago.



Quoting EWRCabincrew (Reply 35):
Quoting Alitalia744 (Reply 22):
DL has already made arrangements with AF in the event B2 changes.

The premise that DL is arranging a slot from AF to get into LHR should tell you that you cannot just simply pay your way into LHR.

Quoting Alitalia744 (Reply 22):
IF that happens, then CO should look to find slots in a similar way that other US carriers will, either by obtaining non-ideal time slots, or by obtaining them via purchase from another SkyTeam carrier willing to give part with them.

When LHR opens up, CO will obtain its slots to LHR just like DL, NW and US will. The only thing in the way is fact we cannot. No matter what CO offers.

You have missed the point entirely. CO blocked Open Skies because they, admittedly, did not have an arrangement in place whereby which once Open Skies took effect they would have slots transferred to them by an alliance carrier (in the same way DL and NW have set up such arrangements with AF and KLM). These slots, presumably, would coem to DL and NW at a discount. Once Open Skies takes effect CO could absolutely go onto the market and buy slots. They absolutely could "just pay" to get into LHR.
 
ual747-600
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 10:55 pm

I wonder how BA/Virgin would like flying into ISP instead of JFK, LGB instead of LAX, MDW instead of ORD, FLL instead of MIA and OAK instead of SFO???

UAL747-600
 
AA717driver
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RE: Bye, Bye Ms. America - EU Open Skies

Mon Jul 24, 2006 11:20 pm

Question: Are the 5th Freedom rights AA gained from TWA still valid in the event that Open Skies is suspended? Maybe that's why AA was silent.

If so, they win either way.TC
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sllevin
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RE: Bye, Bye Ms. America - EU Open Skies

Tue Jul 25, 2006 5:33 am

CO is basically against the entire agreement for any number of reasons; but the two big ones are Virgin America and Heathrow.

They are arguing the Virgin America would be very similar to a foreign operator running a US domestic airline.

More importantly, they are against Open Skies because it's a total crock. It's a "let's play free market now that we have everything that's of value" proposition by the EU.

CO is against having to pay an enormous amount of money to try and gain "free market" equality with all the other Heathrow operators.

Flip it around: insist that CO and other US carriers be granted a number of ideal slots to Heathrow, then have the US cap every single airport in the US with slot restrictions so that no European operator could add a single additional flight not currently operated to the US without having to buy slots from US airlines.

Doesn't seem to fair, does it?

Steve
 
positiverate
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RE: Bye, Bye Ms. America - EU Open Skies

Tue Jul 25, 2006 12:12 pm

Quoting Sllevin (Reply 44):
CO is basically against the entire agreement for any number of reasons; but the two big ones are Virgin America and Heathrow.

They are arguing the Virgin America would be very similar to a foreign operator running a US domestic airline.

That's what CO wants you to believe, but the VirginAmerica application and the Foreign Ownership NPRM/Open Skies are in NO WAY related. VirginAmerica doesn't need the NPRM to pass to be granted an operating cert or to be able to start flights. CO has done a really masterful job of confusing to two on Capitol Hill and, from a lobbying standpoint as a means to an end, they should be complimented on it.

Quoting AA717driver (Reply 43):
Question: Are the 5th Freedom rights AA gained from TWA still valid in the event that Open Skies is suspended? Maybe that's why AA was silent.

More like AA got a win recently on Wright Amendment stuff and they didn't want to push their luck. Also, they would have put the TX Senators (one of which sits on the Committee) in a position of having to choose CO or AA.
 
SJCRRPAX
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RE: Bye, Bye Ms. America - EU Open Skies

Tue Jul 25, 2006 2:42 pm

Quoting AutoThrust (Reply 38):

Quoting ANother (Thread starter):
I still don't understand why the US simply cannot agree to reduce (or eliminate) their ownership and control rules.

This kind of protectionism is just an embarrassment for every country practicing it. In a true democracy there isn't place for that.
I mean every country doing that example: France,Russia etc..

Civil Airlines are in effect part of the Reserve Fleet of the U.S. Airforce. If a carrier is U.S. Owned it can be nationalized in case of emergency and ordered to do what is needed for national defense. A foreign carrier cannot be nationalized. I happen to think its a good policy. The last thing the U.S. needs is to have all the airlines flying in the U.S. foreign owned and find they need to move troops and equipment fast and no planes to do it. I'm sure it does not make sense to someone from Switzerland, but the U.S. is not the only country that does that, also China among others has this ability.

One only needs to look at the shipping industry in the U.S. to see what can happen. The Only U.S. owned ships are the ones traveling between U.S. Ports.
 
masseybrown
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RE: Bye, Bye Ms. America - EU Open Skies

Tue Jul 25, 2006 11:29 pm

There is a more or less disappointing article about the US-EU negotiations in the Wall Street Journal yesterday. (I think the author faced a deadline before she figured out a conclusion.) It sounds as if the administration's ownership relaxation of rules by regulation, not law, will succeed at least until the new Congress gets around to the issue next year. They hope to strike a deal with the EU in October.

[Edited 2006-07-25 16:30:58]
 
vv701
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RE: Bye, Bye Ms. America - EU Open Skies

Wed Jul 26, 2006 11:43 am

Quoting ANother (Reply 21):
The Brits, over the years have proved to be very hard bargainers (why else would you have the restrictive covenants of Bermuda II).

Thanks for the compliment! Just wish it was totally true. But just as now both the US House of Representatives and the US Senate is busy protecting jobs in the US airline industry so it was in 1978 when Bermuda 2 was negotiated. Yes, sure, the agreement only allowed 2 US (and 2 UK) airlines to fly to the USA from LHR. But this restriction did not apply to LGW and there was no restrictions at all from STN or any other UK airport. But there were (although some have since been removed) restrictions as far as UK airlines were concerned on flying to ALL US airports except Atlanta, Boston, Charlotte, Chicago, Denver, Detroit, Dallas Fort Worth, Houston, Los Angeles, Miami, New York (JFK and Newark), Orlando, Philadelphia, Phoenix, Pittsburgh, San Diego, San Francisco, Seattle, Tampa and Washington/Baltimore.

In some cases the hubs of US airlines were 'protected' from British competition. So TW (and PA) was allowed to fly MSP-LHR but British airlines were specifically excluded from that route. Similarly the US airlines with access to LHR could fly from Anchorage, Cincinnati, Cleveland and Minneapolis St Paul into LHR but BA and later VS were forbidden from these routes.

That the UK is keen on Open Skies is not just reflected in UK Department of Transport official statements but in the fact that a bilatertal Open Skies agreement was recently signed with the USA's neighbour, Canada. (This will allow BA to start a service to YYC later this year.) However with the protection Bermuda 2 gives US airlines AND the difficulties these airlines will have in getting suitable LHR slots unless they have very generous partners in their Alliances I can have some sympathy with the stance taken by Congress and the Senate.

But I thought it was not just airline ownership that was a perceived problem in the US although the 'security' issue is to my mind invalid as both the House and the Senate are quite capable of passing a law that protects the governmment's relationship with US registered airlines (irrespective of who owns them) in times on security need. Another problem was the wet leasing of aircraft. As an example BA has wet leased aircraft from a number of different countries over the years such as Iceland and, of course, the USA:

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On none of these occasions was there any threat to UK security and no British trade union objected to American pilots operating American aircraft on behalf of BA for a limited period. (UK law allows such wet leases for periods of up to two years.) Indeed a 742F of Atlas is currently operating out of STN in full Atlas livery with 'Operated for British Airways World Cargo' nose titles.

Of course none of this could happen in reverse. Indeed when Braniff operated BA Concordes on the IAD-IAH route the British had to be EXTREMELY flexible because of the RIGID US regulations. Each Concorde was given special British registrations in the the totally non-standard form G-N94AB. Then these aircraft, the only aircraft to appear on the British Civil Register with numbers in the registration, were reregistered in the form N94AB on arrival from LHR at IAD. Then a Braniff flight crew (monitored by a British flight crew for insurance purposes) flew the IAD-IAH-IAD sectors once the 'G' part of the registration had been physically covered with a special tape and the British registration documents (to meet US regulations) had been 'hidden' in a compartment in the toilet! But of course it is us, the big, bad British and not our American free market friends who are the protectionists!
 
positiverate
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RE: Bye, Bye Ms. America - EU Open Skies

Wed Jul 26, 2006 10:01 pm

Quoting VV701 (Reply 48):
So TW (and PA) was allowed to fly MSP-LHR but British airlines were specifically excluded from that route.



Quoting VV701 (Reply 48):
Of course none of this could happen in reverse. Indeed when Braniff operated BA Concordes on the IAD-IAH route the British had to be EXTREMELY flexible because of the RIGID US regulations. Each Concorde was given special British registrations in the the totally non-standard form G-N94AB. Then these aircraft, the only aircraft to appear on the British Civil Register with numbers in the registration, were reregistered in the form N94AB on arrival from LHR at IAD. Then a Braniff flight crew (monitored by a British flight crew for insurance purposes) flew the IAD-IAH-IAD sectors once the 'G' part of the registration had been physically covered with a special tape and the British registration documents (to meet US regulations) had been 'hidden' in a compartment in the toilet! But of course it is us, the big, bad British and not our American free market friends who are the protectionists!

2 good examplea from over 20 years ago!  Smile

Quoting VV701 (Reply 48):
Similarly the US airlines with access to LHR could fly from Anchorage, Cincinnati, Cleveland and Minneapolis St Paul into LHR but BA and later VS were forbidden from these routes.

Explain, please, which US airlines have CVG, CLE, ANC, etc flights to LHR?

Quoting VV701 (Reply 48):
But I thought it was not just airline ownership that was a perceived problem in the US although the 'security' issue is to my mind invalid as both the House and the Senate are quite capable of passing a law that protects the governmment's relationship with US registered airlines (irrespective of who owns them) in times on security need.

The security issue is NOT the problem, as the NPRM issued by DOT is very explicit on requirements that a foreign investor's voting power be limited to one-fourth of a U.S. airline's stock, and that its representation on the U.S. airline's board of directors or top management be no more than one-third. But within those limits, the foreign entity would be allowed to take control of virtually any and all purely commercial decisions, reserving only safety, security and national defense--participation in the Civil Reserve Air Fleet (CRAF)--for U.S. citizens' control.