kaitak
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US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 4:37 am

Well, pretty much as expected, the US DOT has announced that plans to issue a new rule on foreign ownership of US carriers - seen as the major barrier to an EU/US Open Skies deal - have been scrapped. Thus, there will be no deal. The US has only just announced its plan, so the chain of events leading to a metaphorical mushroom cloud emanating from the EU Commission won't be evident yet; sufficeth say, it will be a very good opportunity to learn swear words in a wide variety of European languages. (Merde! Schweinhund! Ay carumba!)

http://www.rte.ie/business/2006/1205/airlines.html

Anyway, we'll see what the EU Commission says and how it will react, but the ball is in its court now. Frankly, I have very little sympathy for the Commission; I think it was duped. There was a small group of airlines, indeed arguably just one (BA) - which was demanding something which it knew was a non-runner, because the last thing BA wants is hordes of EU and US carriers competing on its prime LHR-US routes. And what better way to frustrate negotiations than to demand something it knew was not on the table. And the EU itself didn't help by demanding cabotage.

So, where to from here? The EU has to refocus its efforts on what is going to be possible. At the end of the day, everyone knew that the issue of O/S would founder on LHR access and US ownership; they must see that this is the key obstacle, so why hold everyone else up when this is clear? They could be negotiating for six years more and it would still come down to this and BA would still find a way to frustrate the whole thing - canny people, they, when they want to be.

This is going to be fun to watch ...
 
Tristarsteve
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 4:50 am

Well BA knew this would happen.
I saw some planning document for 2008 and it said..all figures quoted assume no open skies..
 
commavia
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 5:08 am

This was pretty much a given. As far as I'm concerned, the Bush Administration should just forget about trying to get any E.U.-U.S. bilateral air treaty done in the last two years of his presidency. As long as the Democrats and their labor union fundraisers are calling the shots on Capitol Hill, there is now way they will ever go along with any plan that could have even the slightest chance of jeapordizing a single U.S. airline worker's job in the name of economic liberalization.
 
elmothehobo
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 10:27 am

Quoting Commavia (Reply 2):
As long as the Democrats and their labor union fundraisers are calling the shots on Capitol Hill, there is now way they will ever go along with any plan that could have even the slightest chance of jeapordizing a single U.S. airline worker's job in the name of economic liberalization.

Uh are you serious?? We have a Republican president, a Republican Senate, a Republican House of Reps, a conservative Supreme almost entirely appointed by Republicans. I guess it's still the Democrat's fault though, right?

Remember, Clinton was the one that pushed Free Trade forward to what it is now.
 
Falcon84
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 10:31 am

Quoting Commavia (Reply 2):
there is now way they will ever go along with any plan that could have even the slightest chance of jeapordizing a single U.S. airline worker's job in the name of economic liberalization.

Translation; "More outsourcing, please".

That's all we need-to get rid if more decent U.S. jobs in the name of "economic progress."  Yeah sure
Work Right, Fly Hard
 
elmothehobo
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 10:33 am

A liberalized aviation deal isn't going to lead to outsourcing, it's going to mean more foreign involvement in the aviation industry - and more foreign capital. This will create more jobs in the long run.
 
blrsea
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 10:43 am

I don't understand how open skies will lead to job losses? The european airlines won't be flying domestically within US, so US airlines will still be operating just as they are now. Won't more flights from Europe mean more money spent in US for airport, crew stay, crew spendings, support services for those flights etc?
 
commavia
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 10:56 am

Quoting ElmoTheHobo (Reply 3):
Uh are you serious?? We have a Republican president, a Republican Senate, a Republican House of Reps, a conservative Supreme almost entirely appointed by Republicans. I guess it's still the Democrat's fault though, right?

Nobody every used the word "fault" or assigned any blame.

What I was saying is that this deal had a hard enough time even getting attention with the Republican Congress, so the chances of it getting even brought up for discussion by the Democrats -- especially after they've just been handed control of both houses of Congress in large part due to fears about globalization -- is less than zero. The Dems already made rumblings before this announcement that they would punish the DoT if it decided to proceed with these proposed rulemakings. That was the death knell.

Am I saying its the Democrats' "fault?" No. Am I saying that the pro-union, increasingly globalization-sceptic Democrats will make it virtually impossible for the DoT to carry out this proposal without paying for it dearly? Yes.
 
Iloveboeing
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 11:01 am

I really wish we would have Open Skies. Open competition will benefit all. It will help keep all carriers in line, and keep their costs in check. They'll all be forced to compete, instead of just exist. Competition is also a win-win for the consumers in both the US and Europe.
 
bistro1200
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 1:36 pm

Funny, I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.
Measure to the millimeter, mark with a crayon, cut with an axe.
 
elmothehobo
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 1:56 pm

Quoting Bistro1200 (Reply 9):
I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.

Now the issue with that is yes Americans are working at those institutions, but unless that BMW is made in South Carolina, you are sending your money to pay a German worker when in theory that work could be done in the USA.

To get around this a lot of companies are building manufacturing plants in the US. BMW has a plant in South Carolina, Toyota has plants across the US, heck, even Airbus is building (or might build) a plant in Mobile to build KC-30s.

Quoting Blrsea (Reply 6):
I don't understand how open skies will lead to job losses?

Management jobs might get sent overseas, foreign management may be more willing to outsource work to other countries where costs are lower. Really a lot of senseless Xenophobia. (One of the reasons we're building a damned wall along the Mexican border).

Quoting Falcon84 (Reply 4):
That's all we need-to get rid if more decent U.S. jobs in the name of "economic progress."

A lot of people seem to forget that outsourcing doesn't just happen in the US. Foreign companies outsource work to the US, whether it be R/D, manufacturing or white collar work. But you are right, a lot more high paying jobs are leaving than are being created.

The economy works in a cycle, so who knows, in 20 years the trend may reverse itself and more high paying jobs may return to the US.
 
blrsea
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 2:45 pm

Quoting ElmoTheHobo (Reply 10):
Management jobs might get sent overseas, foreign management may be more willing to outsource work to other countries where costs are lower. Really a lot of senseless Xenophobia

What management jobs? A handful of top guys might be from other countries, but what else will be outsourced? The ground staff, the flight crew, the mid-level management all will continue to be in US. I just don't buy the argument that allowing more foreign investment will lead to job losses.
 
ANother
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 3:44 pm

Quoting ElmoTheHobo (Reply 3):

Remember, Clinton was the one that pushed Free Trade forward to what it is now.

If you go a little further back US domestic deregulation happened when Jimmy Carter was in the White House.
 
elmothehobo
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 3:56 pm

Quoting Blrsea (Reply 11):
A handful of top guys might be from other countries, but what else will be outsourced

That's the point. Currently, a significant portion of upper management must be American, as well as 75% of a company's equity. Move management overseas or bring in managers from overseas who aren't as big on the whole "buy American" thing (not that there are many left), and you could see a whole lot of work that was once done in the US shipped abroad.

Also, maintenance work, customer relations, etc... could be moved abroad.

Quoting ANother (Reply 12):
If you go a little further back US domestic deregulation happened when Jimmy Carter was in the White House.

True, but it was Reagan and Clinton who really pioneered free trade agreements.
 
masseybrown
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 4:08 pm

Quoting ANother (Reply 12):
If you go a little further back US domestic deregulation happened when Jimmy Carter was in the White House.

Yes, but he also agreed to Bermuda II. I guess that was before he was born again, again.
 
ANother
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 5:38 pm

Quoting ElmoTheHobo (Reply 13):
That's the point. Currently, a significant portion of upper management must be American, as well as 75% of a company's equity.

The DOT wasn't proposing to change this rule. Have a look at Jeff Shane's speach here. to see what this really is all about.

But tell me, why does a CEO of a US airline have to be a US citizen? Ford, or GM don't have such rules - nor does Boeing, or other suppliers to the US Military.
 
n1786b
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 7:48 pm

Quoting ANother (Reply 15):
But tell me, why does a CEO of a US airline have to be a US citizen? Ford, or GM don't have such rules - nor does Boeing, or other suppliers to the US Military.

The requirement for a US citizen to be the head of an airline has an historical context that reaches back to the establishment of Flag carriers. Even today in Europe, this can still be seen with the "golden shares" held by governments, or fancy financial holding companies that own but do not 100% control bi-national airlines (I am thinking of Air France / KLM).

IIRC suppliers to the Pentagon DO have to have an American in control. With companies like BAE systems and Bell Labs (part of Lucent recently merged with France's Alcatel), there are programs that only US citizens have access to and lead - just ask BAE systems about their Pentagon deals. And the opposite is true as well - the French only deal with the French (Thales for instance - has international sections and French sections - even in their BUILDINGS) and there are parts of EADS where the Spanish and Germans have no place (the French strategic missle programs)

- n1786b
 
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chrisnh
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 8:10 pm

Quoting Bistro1200 (Reply 9):
Funny, I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.

Nooooooooooooooo...that's altogether 'different,' you see. The Unions here and the Liberals need to give you this pair of cute, colorful glasses so that you can see things the way they OUGHT to be seen...Their way.

As an aside, I wonder how all the Americans who have jobs and are waiting for Virgin AMERICA to take wing are feeling right about now?

Chris in NH
 
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par13del
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RE: US Move "kills" Open Skies ... For Now!

Wed Dec 06, 2006 8:49 pm

Maybe some experts in this field could explain something to me.
The US and a lot of American's push free trade, yet the US trade deficit is growing every year, while countries trading with the US are either even or working on a surplus, how is free trade supposed to aid the US?

The US currently has a lot of carriers, and in many area's too much capacity, how exactly would open sky's benefit, by introducing more competition, more capacity? If the problem within the US is poor service, the only way to solve that is by having "foreigners" do the job? Presently, how many foreign carriers have crew bases in the US, and how many use American crews?

Foreign flights into the US are turned around within hours, many with the same crews, for those flights why would that change under open sky's?

Is this really about service to the customers?
 
masseybrown
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 12:25 am

Quoting Par13del (Reply 18):
The US and a lot of American's push free trade, yet the US trade deficit is growing every year, while countries trading with the US are either even or working on a surplus, how is free trade supposed to aid the US?

Theoretically every country in the world performs whatever work it can do most economically and trades without impediment; and, if a country prices itself out of the market, it either devalues its currency, suffers from unemployment, or finds some other product or service to produce.

In its purest form it doesn't work; but neither does autarchy.
 
MaverickM11
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 12:36 am

Quoting ElmoTheHobo (Reply 3):
We have a Republican president, a Republican Senate, a Republican House of Reps, a conservative Supreme almost entirely appointed by Republicans. I guess it's still the Democrat's fault though, right?

Yes. It is the Democrat's fault:

http://www.atwonline.com/news/story.html?storyID=7273

"Bowing to domestic political pressure exacerbated by the Democrats' rise to power in last month's midterm elections, the US Dept. of Transportation yesterday abandoned its 13-month effort to ease restrictions on foreign control of domestic airlines, delivering a setback to a potential open skies agreement with the EU."
E pur si muove -Galileo
 
Flying-Tiger
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 12:46 am

Quoting Par13del (Reply 18):
The US and a lot of American's push free trade, yet the US trade deficit is growing every year, while countries trading with the US are either even or working on a surplus, how is free trade supposed to aid the US?

Basically an easy answer: currently citizens of the US spend future income by spending borrowed money. Thus, they consum more today than they can actually justify with their current income. That means that consumption (and thus import of manufactured goods) is higher than it actually should be to keep the financial house in order.

=> It is thus not the fault of free trade, but more of excessive spending which increases the trade gap.
Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
 
727forever
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 1:27 am

Quoting Bistro1200 (Reply 9):
Funny, I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.

This is a good point except for one little difference. I haven't seen to many BMW dealerships, shell gas stations, or Ikea stores where the employees desk or counter can skip across several continents within a single day. Cabotage is a real threat to airline flight crewmembers. You wouldn't see ground handlers and gate agents of foreign citizenship on a massive scale but you certainly could see flight crewmembers of foreign citizenship. Those flight crewmembers could start their 2 or 3 week long trip in China on an A340, fly to the U.S., then hop into the company A320 and bounce around the U.S. for a couple of weeks, then fly the A340 back to China. Quite feasable under cabotage and I for one am glad that this is squashed for now. I've watched my dad suffer for years as his manufacturing work goes abroad to China and India due to lower wages in those countries. I will fight to ensure that my work does not do the same.

727forever
727forever
 
PEK18R36L
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 1:51 am

Quoting 727forever (Reply 22):
Cabotage is a real threat to airline flight crewmembers.

The flow of crews works both ways. I was on a domestic Air China flight Beijing to Shanghai the other day, and the flight deck was an Aussie pilot and a British co-pilot.

China is now actively hiring FOREIGN pilots for its airlines - and will be for decades - because it can't produce flight crews fast enough and of sufficient quality.

While your scenario is feasible under cabotage, it is unlikely in the foreseeable future. Chances are greater you'll be spending 2-3 weeks popping around Asia on a flight deck under open skies.

However, if you've got some links to some juicy reports generated/sponsored by ALPA, I'd be happy to have my mind changed.

David
In China, everything is possible - but nothing is easy.
 
bistro1200
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 1:52 am

Quoting 727forever (Reply 22):
Cabotage is a real threat to airline flight crewmembers. You wouldn't see ground handlers and gate agents of foreign citizenship on a massive scale but you certainly could see flight crewmembers of foreign citizenship.

Any of the proposed deals involving open skies relate less to labor (in terms of using foreign nationals on domestic routes) and more to capital. In fact, it's been spelled out in a couple of presentations that "flights operating completely within the USA would have to use staff that have a legal right to work in the USA". Just because the workplace has wings does not make it immune to US Labor law.

Look, I'm as opposed to foreign nationals working US flights as anyone, but that isn't a threat here. The Department of Labor says that to work in the USA, you have to have a legal right to work in the USA. Same goes for US crewmembers working intra-EU flights.

And finally, by the nature of this rule, the demand for inflight, pilot, and other types of jobs will increase and *should* increase wages for all involved. If BA, QF, and LH were looking for US citizens to work their intra-US flights, that would be a good thing, right?
Measure to the millimeter, mark with a crayon, cut with an axe.
 
charlienorth
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 2:18 am

Quoting ElmoTheHobo (Reply 13):
Also, maintenance work, customer relations, etc... could be moved abroad.

Nothing better than being aboard an aircraft overhauled in Honduras.

Quoting MaverickM11 (Reply 20):
Bowing to domestic political pressure exacerbated by the Democrats' rise to power in last month's midterm elections, the US Dept. of Transportation yesterday abandoned its 13-month effort to ease restrictions on foreign control of domestic airlines, delivering a setback to a potential open skies agreement with the EU."

Give credit where credits due..Thank You Democrats!!

Quoting Iloveboeing (Reply 8):
I really wish we would have Open Skies. Open competition will benefit all. It will help keep all carriers in line, and keep their costs in check.

Meaning labor..Right??
Work hard fly right..don't understand it
 
Tristarsteve
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 2:29 am

Quoting ChrisNH (Reply 17):
Quoting Bistro1200 (Reply 9):
Funny, I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.

Nooooooooooooooo...that's altogether 'different,' you see. The Unions here and the Liberals need to give you this pair of cute, colorful glasses so that you can see things the way they OUGHT to be seen...Their way.

But you have an American handle!! I thought all yanks were protectionist.

Quoting N1786b (Reply 16):
The requirement for a US citizen to be the head of an airline has an historical context that reaches back to the establishment of Flag carriers. Even today in Europe, this can still be seen

Like BA you mean?
Ex CEO Eddington Australian
CEO Walsh Irish.

Yes I understand.
 
travelin man
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 2:34 am

The US already has "open skies" agreements with (in order of date signed):
Netherlands
Belgium
Finland
Denmark
Norway
Sweden
Luxembourg
Austria
Iceland
Switzerland
Czech Repub.
Germany
Romania
Italy
Portugal
Slov. Repub.
Turkey
Malta
Poland
France
Bosnia & Herzegovina

http://www.state.gov/e/eb/rls/othr/2006/22281.htm

So that leaves Spain, Ireland, and the UK as the only major European markets with whom we do not have "open skies".

Somehow we've managed to sign a bunch of Open Skies agreements without changing the ownership rules or allowing cabotage, and now, suddenly, with the Heathrow trans-Atlantic oligopoly being threatened, this becomes an "issue".

It's just a red herring to excuse keeping Heathrow closed to real competition. (note, I do think ownership rules should be changed in the US, but it should not be linked to this issue.)
 
elmothehobo
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 2:36 am

Quoting ANother (Reply 15):
But tell me, why does a CEO of a US airline have to be a US citizen? Ford, or GM don't have such rules - nor does Boeing, or other suppliers to the US Military.

Archaic laws that no one has taken the time to change.

Quoting ChrisNH (Reply 17):
The Unions here and the Liberals need to give you this pair of cute, colorful glasses so that you can see things the way they OUGHT to be seen...Their way.

... and the Republicans never spin things in their favor. I coudn't give a sh!t how many sales jobs there are at BMW's or any other foreign car dealership in the US when the cars aren't being made here. Those dealership jobs are a drop in the bucket compared to all the manufacturing jobs being lost.

Free trade has been great for America, but there are a lot of Americans who really got the shaft from it. Once Republicans get that they won't look like such assholes when they talk to people about all the benefits of free trade and how every American benefits from it.

Quoting Par13del (Reply 18):
The US and a lot of American's push free trade, yet the US trade deficit is growing every year, while countries trading with the US are either even or working on a surplus, how is free trade supposed to aid the US?

Yup, and the Euro is 1.33 Dollars. We have become a nation that has its hands in everyone else's means of production, but we really don't make all that much here!

Quoting Par13del (Reply 18):
The US currently has a lot of carriers, and in many area's too much capacity, how exactly would open sky's benefit, by introducing more competition, more capacity?

We don't have as much capacity as you think. A few years ago it was true, but now load factors are at all time highs and fares are getting pretty high to match. It's good for the industry, but how long before it starts to hurt consumers?

Quoting MaverickM11 (Reply 20):
Yes. It is the Democrat's fault:

Yeah, stupid Democrats. If the Republicans loved free trade why didn't they pass it when they had control of ALL THREE BRANCHES OF THE FEDERAL GOVERNMENT. You sound like the Republican who blamed the Foley scandal on the Democrats - saying that Clinton should have gotten rid of the Congressional Pages (sp?) program when he and the Democrats had the House, Senate and the Presidency.

Quoting 727forever (Reply 22):
I haven't seen to many BMW dealerships, shell gas stations, or Ikea stores where the employees desk or counter can skip across several continents within a single day. Cabotage is a real threat to airline flight crewmembers

I don't think the US is considering Cabotatge with anyone except Canada, and that hasn't even come anywhere near happening.
 
MaverickM11
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 3:38 am

Quoting ElmoTheHobo (Reply 28):
If the Republicans loved free trade why didn't they pass it when they had control of ALL THREE BRANCHES OF THE FEDERAL GOVERNMENT. You sound like the Republican who blamed the Foley scandal on the Democrats

Calm down there...that's what the article said. I happen to agree, but honestly, this one of the more black and white cases out there. The Democrats and their union brethren hate foreign ownership. This is nothing new or surprising. Obviously the Repbulicans weren't gung ho about it either.
E pur si muove -Galileo
 
blrsea
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 3:45 am

Quoting Travelin man (Reply 27):
The US already has "open skies" agreements with (in order of date signed):

Add India to that list too.

Quoting ElmoTheHobo (Reply 13):
Also, maintenance work, customer relations, etc... could be moved abroad.

Isn't NW or some other US airlines already doing that? Businesses go where they can to cut cost/make profit. Doesn't the majority of the manufacturing for US companies owned by americans take place in China now?  Smile
 
lowrider
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 3:46 am

I look at this open skies idea and I have to wonder, what's in it for the US?
Do we need more airlines? More capacity? We already have a wide selection of airlines to most destinations of significance. In many cases, it is already cheaper to fly than drive, take the bus, or train. Many of our major airports are struggling with capacity issues. There does not seem to be a problem attracting investor money to credible start-ups. What exactly will Open Skies bring that we currently lack? The only thing I see it adding is more complicated regulation and more expense.
Proud OOTSK member
 
Pope
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 4:06 am

A US Treaty obligation trumps a statute or regulatory ruling. Therefore, technically this is not an impediment to anything. The Senate would simply have to ratify a treaty containing the open sky agreement and the rule would become unenforceable with respect to the counterparty to the treaty.
Hypocrisy. It's the new black for liberals.
 
travelin man
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 4:19 am

Quoting Blrsea (Reply 30):
Add India to that list too.

That was a list of just the European countries the US has Open Skies with, but there are a number of others, including India.
 
masseybrown
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 4:27 am

Quoting Pope (Reply 32):
A US Treaty obligation trumps a statute or regulatory ruling.

Aviation bilaterals (open skies or not) are agreements, not treaties; they do not require Senate concurrence.
 
kaitak
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 4:34 am

The list also includes some countries like Switzerland, Iceland and Bosnia, which are not actually EU members.

Obviously, as you'll see from the little flag on the top left, my concern is Ireland. We have one of the most backward bilaterals with the US, under which, for every one flight ex-DUB to the US, one must go from Shannon. A deal was reached last year, which would have allowed this to change from 3:1 in Dublin's favour and allow EI to add three new US cities. Now, with Open Skies off the agenda, the EU's line is that Ireland must wait for O/S to be agreed (which could take anything from 2-4 years - it's unlikely in the lifetime of this Congress) and of course, our answer to the Commission - in the immortal words of one Mr. B Bunny - is "of course you know, this means war". The likelihood is that the Irish government will have to take Ireland to the ECJ in order to incentivise a more reasonable stance.

What's really ironic is that the Commission, as the standard bearer of competition and competitiveness in the EU, sees nothing wrong with imposing a competitive disadvantage on a member state, in order to achieve an agreement with another country. There are several grounds on which a Court case could be fought, including the extent to which the Commission can interpret its mandate from the ECJ and whether that mandate permits it to impose a competitive disadvantage on another member state.

The EU Commission should not forget that Ireland is one of those countries that needs to approve any new EU Constitution by referendum; if they insist on being bolshie and wilfully blind to our interests, we can return the compliment ...
 
Getdonnie
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 5:43 am

Does this impact the launch of Virgin America?
 
ANother
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 6:08 am

Quoting Getdonnie (Reply 36):
Does this impact the launch of Virgin America?

 confused Why should it? Virgin America is majority owned by US citizens and has show that they meet all of the DOT's current rules for ownership and control.

This case was never about Virgin America.
 
travelin man
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 6:57 am

Quoting Kaitak (Reply 35):
Obviously, as you'll see from the little flag on the top left, my concern is Ireland. We have one of the most backward bilaterals with the US, under which, for every one flight ex-DUB to the US, one must go from Shannon. A deal was reached last year, which would have allowed this to change from 3:1 in Dublin's favour and allow EI to add three new US cities. Now, with Open Skies off the agenda, the EU's line is that Ireland must wait for O/S to be agreed (which could take anything from 2-4 years - it's unlikely in the lifetime of this Congress) and of course, our answer to the Commission - in the immortal words of one Mr. B Bunny - is "of course you know, this means war". The likelihood is that the Irish government will have to take Ireland to the ECJ in order to incentivise a more reasonable stance.

So Ireland cannot negotiate an Open Skies bilateral with the US as other European countries have done? I thought aviation was a sovereign power of individual countries?
 
vv701
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 6:57 am

Quoting Travelin man (Reply 27):
It's just a red herring to excuse keeping Heathrow closed to real competition.

The Bermuda 2 Agreement is, under EU law, illegal. It is therefore a priority of the EU that there should be an Open Skies agreement between the UK and USA and, indeed, all other countries.

So is Travelin man correct? Well I think he might be half way there.

In the EU ultimate responsibility for international aviation matters is vested in the EU, not in the national governments of the sovereign nations that comprise the EU. The EU requires a total open aviation market. Hence, for example, a German airline, Air Berlin is but one of the non-British airlines that operate British domestic flights. They use German registered and serviced aircraft, flown by German air crew with German cabin staff on these services.

But this is not an entirely new development. Over the years, for example, BA has leased various aircraft from American airlines. So, for example, Presidential Airlines BAe146 aircraft were flown by Presidential flight crews on UK domestic services, American Trans Air B727s flown by ATA flight crews flew on BA European services and Atlas Air flight crews flew their company's 747Fs on BA intercontinental freight services. However to protect British employees from low cost foreign competition, any such arrangements must be limited by law to a maximum of two years.

PA had and UA still has fifth freedom rights to certain other European airports out of LHR. Both maintained European fleets of 727s and, in the case of PA, 737s flown by US air crew to fly these services. (All of the above examples are illustrated in the anet photo data base.) Of course you would be correct to tell me that they do not operate those services today. But if LHR is 'closed to real competition' and BA and VS and BD are so uncompetitive then why did UA close down its European flights and, more recently, quit servinf JFK-LHR?

When it comes to international bilateral agreements the EU philosophy is, at first glance, a little less clear. For example in March 2006 the UK and Canadian governments concluded an Open Skies agreement between their two countries. As a result of this agreement AC commenced a YEG-LHR service at the start of this year's winter schedules and BA started an LHR-YYC service on 1 December. But instead of allowing the British government to negotiate a similar agreement with the USA, it took over the negotiations itself. Why?

Was it because of the LHR situation? Was this a bargaining counter they could not resist? Did they see the desire of so many US airlines to serve LHR (even though the Bermuda 2 agreement is effectively an Open Skies Agreement for all US airlines wishing to fly to any other UK airport except LGW but including STN from any airport in the USA) as a bargaining point to break down US protectionism?

But if LHR is 'closed to real competition' it would be interesting to know which US airports offer the same rights to BA or VS that UA has at LHR. It would be interesting to know how the presence of AI and KU as full and active participants on the LHR-JFK route compares in 'real competition' terms with other major international routes out of the US. But most of all it would be interesting to know which US airlines face a greater level of competition at any of their home airports than BA, VS and BD do at their home airport of LHR.

Of course none do. In fact only UA at ORD with 47.5% of all flights in 2004 came anywhere near to facing the competition that BA had at LHR where they operated just 42.3 per cent of flights. At each of the home hubs of the other US legacy carriers their share of flights was three-quarters or more.

At IAH CO had 85.7 per cent of flights.

At DFW AA had 83.2 per cent.

At MSP NW had 79.8 per cent.

At PHL US had 76.4 per cent.

At ATL DL had 74.8 per cent.

So clearly the only American airline that has experienced the same level of competition as BA, VS and BD is UA. And totally dominating IAH and with a hefty 66.2 per cent share of flights at EWR in 2004 you can see why CO is leading the fight against Open Skies.
 
threepoint
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 7:36 am

Quoting ElmoTheHobo (Reply 28):
I don't think the US is considering Cabotatge with anyone except Canada, and that hasn't even come anywhere near happening.

Nor will it, in Canada at least. Transport Canada (and I presume the air carriers as well) are adamantly opposed to cabotage by any foreign airlines within this country.
The nice thing about a mistake is the pleasure it gives others.
 
elmothehobo
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 8:11 am

Quoting Blrsea (Reply 30):
Isn't NW or some other US airlines already doing that? Businesses go where they can to cut cost/make profit. Doesn't the majority of the manufacturing for US companies owned by americans take place in China now?

True, I also said earlier that management would be more willing to do so. I don't believe any US carrier has outsourced all of its maintenance to a 3rd World / Developing Country.

Quoting Threepoint (Reply 40):
Nor will it, in Canada at least. Transport Canada (and I presume the air carriers as well) are adamantly opposed to cabotage by any foreign airlines within this country.

Within the country, but Air Canada was sure as hell hoping to be able to transport US passenger via Canada to other points in the USA. I for one support US and Canadian carriers flying domestic passengers through their respective hubs on their sides of the border. Now it would also be an nightmare for customs & immigration.
 
travelin man
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 8:54 am

Quoting VV701 (Reply 39):
But if LHR is 'closed to real competition' it would be interesting to know which US airports offer the same rights to BA or VS that UA has at LHR. It would be interesting to know how the presence of AI and KU as full and active participants on the LHR-JFK route compares in 'real competition' terms with other major international routes out of the US. But most of all it would be interesting to know which US airlines face a greater level of competition at any of their home airports than BA, VS and BD do at their home airport of LHR.

The statistics are interesting. But you have to make a point of differentiation. Which of those airports you mentioned have competition actively controlled by treaty in terms of destinations and the airlines that they may serve? DFW, IAH, ATL, etc are open to anyone who wants to serve them, to anywhere they would like (of course, with the exception of LHR).

That hardly can be compared with LHR, with the onerous Bermuda II. And since Bermuda II only applies to UK-US routes, it would be interesting to see the % of US-UK routes run by BA from LHR.

Quoting VV701 (Reply 39):
But if LHR is 'closed to real competition' and BA and VS and BD are so uncompetitive then why did UA close down its European flights and, more recently, quit servinf JFK-LHR?

The advent of alliances (see "Star") made UA flying its own metal within Europe not an effective use of its resources. They quit serving JFK-LHR because JFK is now but a minor station in their network.
 
aa757first
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 9:04 am

Quoting ElmoTheHobo (Reply 41):

True, I also said earlier that management would be more willing to do so. I don't believe any US carrier has outsourced all of its maintenance to a 3rd World / Developing Country.

Not all, but I think a lot of America West and jetBlue aircraft have heavy maintenance done somewhere in Central America.

AAndrew
 
sllevin
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 9:23 am

Quoting Iloveboeing (Reply 8):
Open competition will benefit all.

But it wouldn't be open competition at all, because we're not starting from a level playing field. Carriers with existing LHR slots will be able to compete heavily on routes to the United States while the currently-excluded US carriers struggle and have to pay out a ton of money to gain reasonable LHR access.

Now, go back to ground zero and give everyone a chance to compete, and THAT's a free market.

Steve
 
travelin man
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 9:32 am

Quoting Sllevin (Reply 44):
But it wouldn't be open competition at all, because we're not starting from a level playing field. Carriers with existing LHR slots will be able to compete heavily on routes to the United States while the currently-excluded US carriers struggle and have to pay out a ton of money to gain reasonable LHR access.

Now, go back to ground zero and give everyone a chance to compete, and THAT's a free market.

Steve

How is that fair to UA and AA, which DID have to pay $$$ for their LHR slots? (via buying them from TWA and Pan Am).
 
blrsea
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 9:50 am

Quoting Travelin man (Reply 45):
How is that fair to UA and AA, which DID have to pay $$$ for their LHR slots? (via buying them from TWA and Pan Am).

And quite a few other airlines too which have paid good money for gates at LHR!!
 
vv701
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 11:12 am

Quoting Travelin man (Reply 42):
The statistics are interesting. But you have to make a point of differentiation. Which of those airports you mentioned have competition actively controlled by treaty in terms of destinations and the airlines that they may serve? DFW, IAH, ATL, etc are open to anyone who wants to serve them, to anywhere they would like (of course, with the exception of LHR).

Except that:

Access to DFW is controlled by treaty. Under Bermuda 2 neither AA nor BA can fly DFW-LHR.

Access to IAH by BA is controlled by treaty, namely Bermuda 2. Neither they or CO can fly LHR-IAH. So until 28 October BA offered a 772 service LHR-ORD-IAH without any rights on the ORD-IAH leg. Since then they have downgraded the service to a 763 and operate it LHR-DTW-IAH with, of course, no rights on the DTW-IAH leg.

Access to ATL is controlled by treaty as Bermuda 2 stops BA flying from their home base, LHR to ATL.

So all three of the airports claimed as being 'open to anyone who wants to serve them' are actually restricted in access by treaty. Bermuda 2 prevents any British airline flying to them from LHR. And it happens that all three British long-haul multi-class scheduled carriers are based at LHR. As UA discovered when trying to operate JFK-LHR, operating even on this lucrative blue riband route is financially and operationally very difficult when neither of the airports is a main hub. But BA continues to serve IAH from their secondary hub, LGW and indirectly from LHR.

All British airports, including London Stansted but excepting LHR and LGW, are open to all US airlines to fly to from their hubs or any other US airport. This has resulted is services to the likes of BHX, BRS, GLA, MAN and NCL in addition to those to LHR and LGW. However the US airports that BA, VS and BD can fly to from their hub are very severely restricted. Under Bermuda 2 some, like MSY and ANC, can be served by US and not UK airlines. Others, like Portland, can only be served indirectly by any airline - hence the indirect UA flight through ORD. So although we end up with fewer UK gateway cities for US airlines in the UK than there are American gateway cities for British airliner, the numerical difference is not that great and way under the factor of five by which the two populations differ.

However in commercial flight terms geography is as important if not more important than population. To see this just look at the huge size of Canada and its relatively small population but with many more commercial airliners of all sizes on its register than countries like the UK, France and Germany that have much larger populations.

So what does geography say? The United Kingdom is 94,247 square miles. This is smaller than the state of Colorado (104,104 square miles) and, of course, smaller than the many larger states like New Mexico, Arizona, California, Texas and Alaska. But, as we have already seen this is not reflected in the relative number of gateways in the two countries.

The small number of US gateway airports allowed by Bermuda 2 boosts the US domestic airline industry. As I know from my own experience the USA is such a large country that when you land at your chosen gateway airport more often than not you need to take another (domestic) flight. This, like the restrictions on US airline ownership and management, were designed by the Carter administration to protect US jobs.

One final thought. Apart from some (but not all) of the more unusual Central Asian destinations served for BA by BMED, if you need to transfer at LHR to another airline you will nearly always have a choice of airlines. Now that is what I call 'real competition'.
 
elmothehobo
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 11:53 am

Quoting Aa757first (Reply 43):
Not all, but I think a lot of America West and jetBlue aircraft have heavy maintenance done somewhere in Central America.

True. JetBlue gets their heavy maintenance work done in Canada by Air Canada IIRC. JetBlue never had major maintenance & overhaul (facilities for C checks) as they are too young.

United also has work done by AMECO in Beijing.
 
sllevin
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RE: US Move "kills" Open Skies ... For Now!

Thu Dec 07, 2006 2:20 pm

Quoting Travelin man (Reply 45):
How is that fair to UA and AA, which DID have to pay $$$ for their LHR slots? (via buying them from TWA and Pan Am).

First off, AA and UA have made significant premiums from flying to Heathrow. They bought rights to be one of just two US carriers that could operate to Heathrow. Notice that neither of those airlines are pushing to see CO, NW, DL and US operate into LHR.

Which countries have established Open Skies with the UK without any Heathrow slots for their airlines?

Steve

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