kaitak
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UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 9:22 pm

This reads very much like a spin from UK carriers, trying to arm twist the UK into pulling the rights of new US entrants, if the US doesn't move ahead with the next phase of Open Skies. I don't see that happening in 2008, with the election coming up. I see this really as an effort by UK carriers to try and force the issue; it seems to be mainly Virgin pushing for the withdrawal of rights. I don't see that happening.

http://www.travelweekly.co.uk/Articl...s-deal-with-us-could-collapse.html

What do you think?

Personally, I think the real catalyst for a serious bilateral spat between the EU and US could be moves by the EU to include aviation in emissions trading; the US has already ruled this out and the EU seems determined to go ahead with it.
Hopefully any disagreement on that could be contained, but I wonder if the US would use the second stage of bilateral negotiations as a quid quo pro, i.e. move ahead with aviation being part of emissions trading and say goodbye to stage two. That could result in a collapse of the O/S process.
 
by738
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 9:30 pm

Its should be real open skies and US should allow it there too to be fair.
 
ikramerica
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 9:32 pm

If that happens, the USA should immediately pull the plug on VX in retaliation.

Quoting BY738 (Reply 1):
Its should be real open skies and US should allow it there too to be fair.

Whatever.
Of all the things to worry about... the Wookie has no pants.
 
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scbriml
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 9:42 pm



Quoting Ikramerica (Reply 2):
If that happens, the USA should immediately pull the plug on VX in retaliation.

What has ACES got to do with this?  wink 
Time flies like an arrow. Fruit flies like a banana!
 
Junction
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 9:43 pm

Is the issue that they want UK carriers to able to fly U.S. domestic? I couldn't really tell from the article.
 
Junction
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 9:47 pm

VX is the code for Virgin America. The decode given on here is wrong. The flight all display with VX:

VX 834 LAXSFO 630A+ 750A 320 0 120
VX1848 LAXSFO 1035A+1155A 319 0 120
VX 846 LAXSFO 1150A+ 110P 320 0 120
VX 836 LAXSFO 155P 315P 320 0 120
VX1852 LAXSFO 405P 525P 319 0 120
VX 832 LAXSFO 625P 745P 320 0 120 >
 
LHRBlueSkies
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 9:51 pm



Quoting Ikramerica (Reply 2):
Whatever.

Oh dear, not afraid of some competition from UK carriers are you?

Quoting Junction (Reply 4):
Is the issue that they want UK carriers to able to fly U.S. domestic?

Basically, yes!
flying is the safest form of transport - until humans get involved!
 
IADCA
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 10:07 pm

Well, Article 21 of the Open Skies agreement provides that Stage II negotiations must begin within 60 days of the provisional application of Open Skies (March 30, 2008), and that within 18 months, if no agreement has been reached, they can then review their progress. If no agreement has been reached with 12 months of the start of that review, THEN either party can suspend the agreement. However, such suspension could take effect no sooner than 12 months from that point. That's a pretty long lag for the Brits to wait for negotiations to fail.

However, Article 25 provides for cancellation of the agreement notwithstanding failure of Stage II negotiations. That allows cancellation at the end of the next IATA traffic season ending after a 12-month period from the time of cancellation. So once it starts, it goes for at least one year. That means that even if the Brits were somehow able to persuade the entire EU to cancel this agreement on the day it started, Heathrow would still be opened up for 1 year.

Therefore, the only way the British can unilaterally stop the agreement is via Article 26, and failing to certify the completion of their procedures for implementation. It's a bit unclear what happens under the treaty if one of the countries intentionally breaches it; the adjudication articles (18 and 19) only seem to cover "interpretation or application" of the agreement, not what happens if someone breaches it. The Brits are further in hot water because they're not really even contemplated as a "party" to the treaty, but rather just a part of one of the parties.

Therefore, them intentionally breaching the treaty by failing to certify completion of preparations would seem to stop the March 30 date, but it's unclear what the hell would happen after that. It'd be a gigantic mess for sure though.
 
IADCA
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 10:11 pm



Quoting LHRBlueSkies (Reply 6):
Quoting Junction (Reply 4):
Is the issue that they want UK carriers to able to fly U.S. domestic?

Basically, yes!

Then they shouldn't have made the deal. You make the bed, you have to lie in it or pay the consequences. Regretting a deal isn't grounds for mandatory re-negotiation. What this gamesmanship is really comprised of is the Brits threatening a bad-faith breach (not allowing implementation) in retaliation for their anticipation of a bad-faith breach by the Americans (refusing to reasonably negotiate Stage II).
 
BlueShamu330s
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 10:25 pm



Quoting Ikramerica (Reply 2):
If that happens, the USA should immediately pull the plug on VX in retaliation.

Why should they pull the plug on a US company and put a couple of thousand US citizens out of work...?  stirthepot 

Shamu
So I drive a 4x4. So what?! Tax the a$$ off me for it...oh, you already have... :-(
 
sbworcs
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 10:44 pm



Quoting IADCA (Reply 8):
What this gamesmanship is really comprised of is the Brits threatening a bad-faith breach (not allowing implementation) in retaliation for their anticipation of a bad-faith breach by the Americans (refusing to reasonably negotiate Stage II).

In all honesty though I think that most people knew that this "2nd Stage" was never gonig to happen - too many in the US will oppose.
The best way forwards is upwards!
 
avek00
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 10:53 pm

I fully expect the Brits to pull out every stop -- legal, regulatory, commercial, and otherwise -- to derail Open Skies. The UK would be remiss if it did not exhaust all overt and discreet efforts to protect its aviation market.
Live life to the fullest.
 
pixuk
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 11:05 pm

I don't see the UK 'pulling out every stop' to derail Open Skies - we want it as much as the US do - but I do see the UK fighting hard for the 2nd stage of negotiations (as agreed by both sides) to open up the US too. If the US fail to do so, then the UK is perfectly within its right to throw a spanner in the works, otherwise the EU has given up freedom for US carriers to operate within Europe and unrestricted from Heathrow for what? Seems a like a very one-sided deal.
 
ikramerica
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 11:06 pm



Quoting LHRBlueSkies (Reply 6):
Oh dear, not afraid of some competition from UK carriers are you?

Nope. It's not about that. It's about a deep pocket international carrier coming into the USA and plucking high yield passengers from domestic routes while leaving other carriers to clean up the scraps. It would have a deadly effect on our carriers, with no commensurate risk on the UK carriers side, since the domestic market in the UK is not where they make most of their money.

I don't want to see our carriers collapse and lose service to smaller markets in out country because a foreign airline is allowed to dump capacity on high yield routs. Connecting the smaller cities in our vast country is far more important to me that CO and DL having access to LHR.

If the UK is going to try to pull anything, the response is NOT to capitulate but to retaliate. One simple way is to apply slots to JFK and ORD and trim VS and BA's access, while pulling VX's cert. We can also grant more access to JFK by EK and AF, for example, and encourage them to fly via LHR.

If the UK wants a war on this, they'll get one. The USA lived far too long under the B2 agreement that was more beneficial to the UK. But we signed it, negotiated the best we could for access, we had to live with it.

Now the new deal is signed, and if the UK doesn't want to live with it... well, that's their problem. Not only are they trying to break it, but they are doing so years before we were even supposed to discuss another round of liberalization.

Quoting BlueShamu330s (Reply 9):
Why should they pull the plug on a US company and put a couple of thousand US citizens out of work...?

To retaliate against VS, that's why. VX is already on thin ice by not strictly adhering to their approval and having SRB much more involved. Since VS is the lead dog on this fight, it would seem that he really does want VX to just be part of the Virgin brand and not really be American.

As for putting people out of work, it's not that simple. How many people won't be employed if the UK blocks access to LHR for our carriers? Those were going to be expansion jobs. And are all those VS employees unfit to find work elsewhere in the industry? If the demand was there for that capacity, isn't that demand to be met by other carriers? If so, won't they need employees?
Of all the things to worry about... the Wookie has no pants.
 
by738
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 11:13 pm



Quoting Ikramerica (Reply 13):
Nope. It's not about that. It's about a deep pocket international carrier coming into the USA and plucking high yield passengers from domestic routes while leaving other carriers to clean up the scraps. It would have a deadly effect on our carriers, with no commensurate risk on the UK carriers side, since the domestic market in the UK is not where they make most of their money

So US carriers are not not cherry picking the lucrative transatlantic routes.....
Yes its all about competition. Or current lack of it.
 
jonnywishbone
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 11:22 pm

Seems to me that the 'high yield' domestic passengers are thin on the ground! Whenever I am on US or AA domestically, I am the only one not on a mileage upgrade.

I am sure my american friends will viamentally oppose 'open skies' and so they should - their own products are woeful compared to European and Asian carriers.

Who would honestly prefer to travel AA first on an overnight LAX-JFK in preference to a BA club bed if the fares were comparible, the FF points the same etc etc.

Just HOW patriotic would you be if it were your money and your sleep you needed - I think the US carriers should be very worried indeed.

J
 
atmx2000
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 11:38 pm

Quoting Sbworcs (Reply 10):
In all honesty though I think that most people knew that this "2nd Stage" was never gonig to happen - too many in the US will oppose.

Well, yeah. It's difficult for an airline to invade the hubs of European majors, unless they had a signifcant presence. We simply don't see BA, IB, LH, or AF trying to invade each others hubs, so the 5th freedom rights to other European countries don't have much value to US airlines. Why give access to our more easily entered market?

Quoting BY738 (Reply 1):
Its should be real open skies and US should allow it there too to be fair.

Nonsense. The EU countries should give up their separate ICAO memberships, and then the US should give up the the basically unused rights it has for 5th freedom flights between EU countries. As long as the EU countries remain separate signatories to ICAO agreement, flights originating from a country outside the EU and going between two EU countries picking up traffic along the way will be 5th freedom.

Quoting Ikramerica (Reply 2):
If that happens, the USA should immediately pull the plug on VX in retaliation.

Nah the US should then announce that they will pull out of Bermuda II and that they will stop flights between Heathrow and the US airports where a major US international carrier is locked out of Heathrow by the original agreement. As long as Delta is shut out of LHR from JFK, no airline will be able to fly LHR-JFK, and as long as CO is locked out of LHR, no airline will be able to fly LHR-EWR. A lot of the value in Heathrow comes from the US-UK business given that a rather substantial portion of the passengers passing through the airport are arriving/departing/connecting/transferring from US flights. Curtailing that business will remind the UK airlines that the US has a legitimate gripe about Heathrow access. The setup under Bermuda II is archaic and was negotiated under the threat that the UK would pull out from the original Bermuda agreement and throttle the then dominant position of US carriers on US-UK routes.

[Edited 2007-12-04 16:11:01]
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
breaker1011
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Tue Dec 04, 2007 11:40 pm

I will bet this - a full-blown Open Skies will certainly change the competitive landscape. Some carriers are going to win, and some are going to loose. And the deep packets referred to are going to be the players really rocking the boats in years to come - both US and EU boats I might add. Just wait till EK, Quater, etc eye more Europe-USA routes as SQ is considering already. Guess we need to be careful what we wish for eh? It does feel like all this from a US perspective was hell-bent on one thing - getting LHR access to US carriers that didn't have it.

Will it be worth it in the end? I assure you AA and UA don't think so! Time will tell, strap yourselves in. I for one think I will miss the pleasure of easy service to Gatwick!!
Life's tough. It's even tougher if you're stupid. J. Wayne
 
BlueSkys
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:03 am



Quoting Ikramerica (Reply 13):
And are all those VS employees unfit to find work elsewhere in the industry? If the demand was there for that capacity, isn't that demand to be met by other carriers? If so, won't they need employees?



Quoting Ikramerica (Reply 2):
If that happens, the USA should immediately pull the plug on VX in retaliation.

I dont quite know what is clouding your judgement....patriotism?....

Do you really think it is that simple? "Hi, I am from the former airline known as Virgin America.... Americans did not like us so now I have no job, can you help me out UA? I have a family to feed and I am american so you must give me a job"
 sarcastic 

Foreign or not, they are a player in your economy that is helping your economy. I am not going to get into examples of how the USA take over other countries and 'borrow' resources that do not belong to them or give any benefit to the people of that country or its economy. So maybe you should be a little bit more humble and realize that Virgin America is not the devil just because it is indirectly being run by a Britt.
 
commavia
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:23 am



Quoting Kaitak (Thread starter):
This reads very much like a spin from UK carriers, trying to arm twist the UK into pulling the rights of new US entrants, if the US doesn't move ahead with the next phase of Open Skies.

Yeah, lots of bluster and chest-beating to assert themselves and show the U.S. and the E.U. that they're still not happy, not that it's going to change much. This whole little move by the U.K., coming on the heels of their yells last year and earlier this year that they would never agree to Open Skies unless cabotage was included, and then amending that to they would never agree to Open Skies unless the U.S. started talking about cabotage, and on and on, is just comical.

They know exactly what Brussels and Washington know: it's not going to happen. Not now, and almost certainly, not for quite some time.

The national mood and political climate in the U.S. the way it is right now, the Democrats in control of congress who were largely sweeped in on a popular suspicion of globalization, there is just absolutely no way that this could ever happen. Even if the U.S. did come back to the table next year and start actively negotiating a "Stage 2" deal, and even if the Bush DoT did agree to cabotage within the U.S. (fat chance), it would be next to impossible to ever get Congress to okay it. And once again, the U.K. knows it.

Furthermore, the U.K. knows that if they really do throw a tantrum and put the ice on this entire deal, they're going to have to explain it to the entire rest of the E.U. which, on balance, seems pretty much okay with the deal as-is. Sure, they all want U.S. cabotage, too, but their rationality and realism tells them it won't happen, and they're all seemingly satisfied to have ATI with their U.S. partners and be able to fly anything E.U.-U.S. unrestricted (including from Heathrow!).

So, come on, U.K. government: I dare you to kill this agreement. The result will be this: the U.K. will get nothing out of it except hurting themselves. The U.S. will likely immediately revoke British carriers' landing rights at U.S. airports, and perhaps all E.U. carriers just to piss off everyone and get even more people mad at Britain, and then the two sides will sit down and, once again, for those playing the home game, figure out what we all already know: it's not going to happen.

Important to remember: British carriers need the U.S. market a whole lot more than U.S. carriers need the U.K.

Quoting Kaitak (Thread starter):
the US has already ruled this out and the EU seems determined to go ahead with it.

Yeah, the E.U. seemed "determined" to get cabotage in the U.S., too, but they dropped that little chestnut when they realized - news flash - that it was never going to happen.

Quoting Ikramerica (Reply 2):
If that happens, the USA should immediately pull the plug on VX in retaliation.

I like it. And while we're at it, let's just revoke every British carrier's landing rights at U.S. airports.

Quoting Junction (Reply 4):
Is the issue that they want UK carriers to able to fly U.S. domestic? I couldn't really tell from the article.

The issue is they don't want more competition on U.S.-Heathrow routes, and the U.S. doesn't want their competition on U.S. domestic routes.

Quoting Sbworcs (Reply 10):
In all honesty though I think that most people knew that this "2nd Stage" was never gonig to happen

It's not "most" people. It's "all" people, at least all rational people. The U.K. knew full well - or at least should have known - what this agreement was: this was it. It was a done deal. Sure, they can come back and keep talking, blah, blah, blah, but there is absolutely no way whatsoever in the current political environment in the U.S. that the U.S. will ever agree to cabotage. Not going to happen. The U.K. knows it.

Quoting Pixuk (Reply 12):
but I do see the UK fighting hard for the 2nd stage of negotiations (as agreed by both sides) to open up the US too.

Have fun "fighting hard." They'll be fighting for the rest of their natural lives.

Quoting Breaker1011 (Reply 17):
I will bet this - a full-blown Open Skies will certainly change the competitive landscape. Some carriers are going to win, and some are going to loose.

The thing is, though: if people were smart, they'd recognize that if managed well, every airline can benefit from this. Nobody has to lose. Willie Walsh said it himself, that in the short-run, the impact on BA from Open Skies would likely be "manageable," and in the long-run, it might even have an upside.
 
breaker1011
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:29 am



Quoting Commavia (Reply 19):
The thing is, though: if people were smart, they'd recognize that if managed well, every airline can benefit from this. Nobody has to lose. Willie Walsh said it himself, that in the short-run, the impact on BA from Open Skies would likely be "manageable," and in the long-run, it might even have an upside.

I agree - but you make a big wish there to think that all companies will manage it well! Some will be extraordinary but some with withdrawl because they can't figure out how to put themselves together against newer and in many cases, wealthier competition.
Life's tough. It's even tougher if you're stupid. J. Wayne
 
avek00
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:33 am



Quoting Pixuk (Reply 12):
I don't see the UK 'pulling out every stop' to derail Open Skies - we want it as much as the US do -

No, the Brits don't. The whole point of Open Skies to savage the UK-USA air market -- that's why the new services announced focus almost exlcusively on adding flights by USA and EU carriers from London Heathrow to the USA.

No one really give's a rat's *ss about adding flying from Paris or anywhere else -- all the airlines want to go where the money is, and the money is in operating transatlantic flights from London.

Quoting Commavia (Reply 19):
So, come on, U.K. government: I dare you to kill this agreement. The result will be this: the U.K. will get nothing out of it except hurting themselves. The U.S. will likely immediately revoke British carriers' landing rights at U.S. airports, and perhaps all E.U. carriers just to piss off everyone and get even more people mad at Britain, and then the two sides will sit down and, once again, for those playing the home game, figure out what we all already know: it's not going to happen.

Far more likely would be a freeze on any new USA services to LHR past, say, April 1, 2008. This could in fact make everyone happy if carried out with the proper delicacy.
Live life to the fullest.
 
DLPMMM
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:34 am



Quoting Commavia (Reply 19):

 checkmark 

At least someone here understands what is really going on here behind the political bluster.

Cabotage was always just a strawman in the negotiations, used by the EU as a "stumbling block" while the EU worked out a unified negotiating position.
 
AirNZ
Posts: 544
Joined: Fri Feb 11, 2005 6:03 pm

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:40 am



Quoting Ikramerica (Reply 2):
If that happens, the USA should immediately pull the plug on VX in retaliation.

Why? VX is an American company.....as determined by your own authorities.

Quoting Ikramerica (Reply 2):
Whatever.

Very predictable, and indicates precisely that most Americans have no interest whatever in 'free trade', except when it sounds good and suits them.
Flown:F27/TU134/Viscount/Trident/BAC111/727/737/747/757/767/777/300/310/320/321/330/340/DC9/DC10/Dash8/Shorts330/BAe146
 
FreequentFlier
Posts: 575
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:44 am



Quoting Commavia (Reply 19):
Yeah, lots of bluster and chest-beating to assert themselves and show the U.S. and the E.U. that they're still not happy, not that it's going to change much. This whole little move by the U.K., coming on the heels of their yells last year and earlier this year that they would never agree to Open Skies unless cabotage was included, and then amending that to they would never agree to Open Skies unless the U.S. started talking about cabotage, and on and on, is just comical.

They know exactly what Brussels and Washington know: it's not going to happen. Not now, and almost certainly, not for quite some time.

The national mood and political climate in the U.S. the way it is right now, the Democrats in control of congress who were largely sweeped in on a popular suspicion of globalization, there is just absolutely no way that this could ever happen. Even if the U.S. did come back to the table next year and start actively negotiating a "Stage 2" deal, and even if the Bush DoT did agree to cabotage within the U.S. (fat chance), it would be next to impossible to ever get Congress to okay it. And once again, the U.K. knows it.

Well said. Even if the cabotage rights were reciprocal, there is simply no chance of this happening anytime in the near future. US carriers are probably not nearly as interested in picking up the high yield passengers between say, LHR and MAN for instance, as British carriers would be interested in picking up the high yield traffic between say, JFK and LAX, or JFK and SFO, or MIA and SEA, or BOS and SAN, etc etc. So even if the deal was reciprocal in law, it wouldn't really be "fair" per se.

Then throw in the political climate. I happen to be a staunch free trader myself, but the political climate in the US currently tends to be skeptical of free trade. You can sure as hell bet that the import of foreign labor who won't be paying US income taxes to work domestic flights is going to be looked at with even more scorn potentially.

So while not taking a view on this myself, the reality is that there is no chance whatsoever of the US DOT granting cabotage rights to BA, VS etc anytime soon. If you're waiting for it, don't hold your breath.
 
AirNZ
Posts: 544
Joined: Fri Feb 11, 2005 6:03 pm

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:45 am



Quoting IADCA (Reply 8):
hen they shouldn't have made the deal. You make the bed, you have to lie in it or pay the consequences. Regretting a deal isn't grounds for mandatory re-negotiation

Correct me if I'm wrong, but wasn't this precisely what all the whinging was about from Americans regarding Bermuda II?
It was a bi-lateral treaty negotiated and ratified by the US government, but yet always conventiently portrayed an a British invention.
Flown:F27/TU134/Viscount/Trident/BAC111/727/737/747/757/767/777/300/310/320/321/330/340/DC9/DC10/Dash8/Shorts330/BAe146
 
AirNZ
Posts: 544
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:50 am



Quoting Ikramerica (Reply 13):
Nope. It's not about that. It's about a deep pocket international carrier coming into the USA and plucking high yield passengers from domestic routes while leaving other carriers to clean up the scraps. It would have a deadly effect on our carriers, with no commensurate risk on the UK carriers side, since the domestic market in the UK is not where they make most of their money.

I don't want to see our carriers collapse and lose service to smaller markets in out country because a foreign airline is allowed to dump capacity on high yield routs. Connecting the smaller cities in our vast country is far more important to me that CO and DL having access to LHR.

Sorry, but that's what it's all about. If certain US carriers can't compete in the open market then get out of it.....how much protectionism do they need? In other words, the same old story, give US carriers unfettered rights to whatever/wherever they want, as long as they are protected in their home market.
Flown:F27/TU134/Viscount/Trident/BAC111/727/737/747/757/767/777/300/310/320/321/330/340/DC9/DC10/Dash8/Shorts330/BAe146
 
Baexecutive
Posts: 594
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:54 am

Why not? Afraid of some competition? BA/VS would wipe the floor with your carriers on service alone LOL

Quoting AirNZ (Reply 26):
If certain US carriers can't compete in the open market then get out of it.....how much protectionism do they need?

EXACTLY.....Chapter 11??
 
avek00
Posts: 3155
Joined: Mon Oct 25, 2004 5:56 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:55 am



Quoting FreequentFlier (Reply 24):
You can sure as hell bet that the import of foreign labor who won't be paying US income taxes to work domestic flights is going to be looked at with even more scorn potentially.

Actually, for long-haul, the fear is in the opposite direction -- European workers are afraid that one day US airline workers, who cost roughly 30% less, will be operating a large number of ex-EU longhaul flights. This is in fact a large part of the impetus for the discussion of transatlantic airline mergers -- the Euro managers want to toss Euro labor for cheaper American labor, boosting profits and allowing greater competitive flexibility.

Quoting AirNZ (Reply 25):
It was a bi-lateral treaty negotiated and ratified by the US government, but yet always conventiently portrayed an a British invention.

Bermuda II is NOT a treaty. Neither is the US-EU Open Skies agreement. In fact, any government leader who proposes a bilateral air services treaty should be thrown out of office.
Live life to the fullest.
 
atmx2000
Posts: 4301
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:58 am



Quoting Commavia (Reply 19):
I like it. And while we're at it, let's just revoke every British carrier's landing rights at U.S. airports.

That's too severe. My proposal is better, as it highlights the assymmetry in the current aviation agreement, and eliminates the advantage it conferrs. No LHR flights to/from a given US airport unless all US carriers with major international operations at that airport have reciprocral rights to LHR. This will shut down LHR-JFK/EWR, LHR-PHL, LHR-DTW, LHR-PHX, and probably a few other routes. The first one will be a whopper.

Quoting Avek00 (Reply 21):
No, the Brits don't. The whole point of Open Skies to savage the UK-USA air market -- that's why the new services announced focus almost exlcusively on adding flights by USA and EU carriers from London Heathrow to the USA.

Nah, the whole point was to legitimize the EU as a negotiating authority for air service agreements despite the invidual European countries have ICAO membership. The only possible significant benefit for the US was getting LHR access. The EU got 7th freedom rights for EU carriers from other EU countries.

Quoting Avek00 (Reply 21):
No one really give's a rat's *ss about adding flying from Paris or anywhere else -- all the airlines want to go where the money is, and the money is in operating transatlantic flights from London.

Paris was already an open market as far as the US was concerned, and there are no assymmetries in the relationship. Now if AF had gotten the French government to force US carriers to CDG from Orly while continuing to operate some Orly-US flights, that would be a different matter.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
commavia
Posts: 9626
Joined: Mon Apr 25, 2005 2:30 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 12:59 am

Quoting FreequentFlier (Reply 24):
US carriers are probably not nearly as interested in picking up the high yield passengers between say, LHR and MAN for instance, as British carriers would be interested in picking up the high yield traffic between say, JFK and LAX, or JFK and SFO, or MIA and SEA, or BOS and SAN, etc etc.

A very important point.

The obvious and severe political ramifications (the whole "foreigns steeling our jobs" scare) notwithstanding, even if Bush could get this through Congress politically, which he most certainly cannot, the underlying fundamentals of the deal just aren't attractive to the U.S.

This is another point that isn't mentioned much vis-a-vis why cabotage won't happen: it reflects the gulf in negotiations between the U.S. and the E.U. who are fundamentally at different places. The E.U. still wants a lot - emissions trading cooperation, cabotage, etc., but really just cabotage more than anything else - but the U.S. doesn't. The deal reached last year was pretty much it for the U.S. - they got virtually every box checked off on their wish list.

The U.S. doesn't really want nor need to have rights to fly customers within the E.U. (I refuse to call it "cabotage," as that would imply that the E.U. was a sovereign and independent nation, which it isn't.) Those rights are largely antiquated for the U.S. carriers with their 757s and 767s anyway, and were long ago repudiated. I think the last time a scheduled U.S. carrier flew flights within Europe was UA's tags out of LHR to AMS and BRU which ended, if I'm not mistaken, 4-5 years ago.

And further still, beyond the fact that the U.S. doesn't want rights to fly within the E.U., given such rights to E.U. carriers is a fundamentally unfair deal, which is yet another reason why the U.S. won't agree to it. It isn't fair - from the U.S. perspective - to surrender access to the largest and one of the most unrestricted air markets on earth to the E.U., when in return, U.S. carriers will get essentially nothing. All the major airports are heavily slot-controlled, with all slots accounted for, and trains carry so much traffic within the E.U. (less than half the size of the U.S.) that U.S. carriers would have no chance anyway.

Why would the U.S. give BA, LH or AF completely unfettered access to the largest air market on earth, with the ability to fly just about anywhere they want, any time, while in Europe, AA would end up with a 9:50pm FRA-MXP, or DL with a 3:35am AMS-PRG, or CO with a 7:05am MAD-ARN. What, in that deal, is supposed to be at all attractive to the U.S. side?

Quoting AirNZ (Reply 26):
If certain US carriers can't compete in the open market then get out of it.....how much protectionism do they need?

Pot, meet kettle, kettle, pot.

Coming from the British, even using the words "US carriers" and "protectionism" in the same sentence seems like a joke. The British carriers - BA in particular - are among the most closely guarded and heavily protected on earth. Just witness what has transpired in the last 18 months regarding Heathrow: the U.K. government has gone nuts over the possibility that BA may face competition on their prized U.S.-Heathrow routes, which make up a substantial portion of their profits (and for good reason).

U.S. carriers, on the other hand, have used a completely legal process - reorganization bankruptcy - to restructure their finances and operations. Sure, I don't like that they have gotten to repudiate some of their debt, either, but that's hardly protectionism. The U.S. isn't actively seeking to "protect" U.S. carriers with the bankruptcy code here. That code applies to everyone - all companies. It's not as if the U.S. has a different bankruptcy code that applies only to U.S. airlines, or to U.S. companies, at all, for that matter, as evidenced by Columbian airline Avianca coming to the U.S. to file for bankruptcy.

[Edited 2007-12-04 17:03:51]
 
Baexecutive
Posts: 594
Joined: Fri Jul 01, 2005 9:29 pm

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 1:19 am

I don't see any harm in opening up LHR to competition, BA will continue to flourish whatever happens as 'service' wise they wipe the floor with US carriers.......

My tuppence worth : )
 
FreequentFlier
Posts: 575
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 2:00 am



Quoting Commavia (Reply 30):
The obvious and severe political ramifications (the whole "foreigns steeling our jobs" scare) notwithstanding, even if Bush could get this through Congress politically, which he most certainly cannot, the underlying fundamentals of the deal just aren't attractive to the U.S.

This is another point that isn't mentioned much vis-a-vis why cabotage won't happen: it reflects the gulf in negotiations between the U.S. and the E.U. who are fundamentally at different places. The E.U. still wants a lot - emissions trading cooperation, cabotage, etc., but really just cabotage more than anything else - but the U.S. doesn't. The deal reached last year was pretty much it for the U.S. - they got virtually every box checked off on their wish list.

The U.S. doesn't really want nor need to have rights to fly customers within the E.U. (I refuse to call it "cabotage," as that would imply that the E.U. was a sovereign and independent nation, which it isn't.) Those rights are largely antiquated for the U.S. carriers with their 757s and 767s anyway, and were long ago repudiated. I think the last time a scheduled U.S. carrier flew flights within Europe was UA's tags out of LHR to AMS and BRU which ended, if I'm not mistaken, 4-5 years ago.

And further still, beyond the fact that the U.S. doesn't want rights to fly within the E.U., given such rights to E.U. carriers is a fundamentally unfair deal, which is yet another reason why the U.S. won't agree to it. It isn't fair - from the U.S. perspective - to surrender access to the largest and one of the most unrestricted air markets on earth to the E.U., when in return, U.S. carriers will get essentially nothing. All the major airports are heavily slot-controlled, with all slots accounted for, and trains carry so much traffic within the E.U. (less than half the size of the U.S.) that U.S. carriers would have no chance anyway.

Why would the U.S. give BA, LH or AF completely unfettered access to the largest air market on earth, with the ability to fly just about anywhere they want, any time, while in Europe, AA would end up with a 9:50pm FRA-MXP, or DL with a 3:35am AMS-PRG, or CO with a 7:05am MAD-ARN. What, in that deal, is supposed to be at all attractive to the U.S. side?

Excellent analysis. Welcome to my RU list. Any sort of legal contract negotiation implicitly assumes that both parties agree to it without any sort of coercion. If US carriers have nothing to gain from gaining cabotage rights (or whatever you want to call them) within the EU, then why would the US DOT ever allow British carriers access to the US market? Surely this will increase competition and reduce prices, but will be done at the expense of US airline employees who have just gone through painful bankruptcy processes. The winners will be foreign airline employees who don't pay US income taxes. Any President (Republican or Democrat) who agreed to such a deal would be roasted by the labor unions, and probably by most non-union voters as well.

Personally, I can see the argument for allowing such competition, but I'm not sure where I stand. Consider me indifferent at best. Which would probably make me way more enthusiastic than most right now.
 
commavia
Posts: 9626
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 2:14 am



Quoting FreequentFlier (Reply 32):
If US carriers have nothing to gain from gaining cabotage rights (or whatever you want to call them) within the EU, then why would the US DOT ever allow British carriers access to the US market?

Exactly.

Quoting FreequentFlier (Reply 32):
Any President (Republican or Democrat) who agreed to such a deal would be roasted by the labor unions, and probably by most non-union voters as well.

Ding, ding, ding ... no more calls ... we have a winner.  Smile

Quoting FreequentFlier (Reply 32):
Personally, I can see the argument for allowing such competition, but I'm not sure where I stand. Consider me indifferent at best. Which would probably make me way more enthusiastic than most right now.

I consider myself in exactly the same position. While I consider myself about as pro-trade and pro-free markets as they come, at least in principle, I'm not sure where I stand on the practicalities of this U.S.-E.U. deal vis-a-vis cabotage for E.U. carriers. While, again, in principle, I do think that more and more open markets are something we should pursue, and while this would certainly be a means to that end, I am also acutely aware that it would be an enormous one-sided deal and very unfair to the U.S. side, who would stand to gain nothing but at the expense of quite a bit of competition.

That being said, as you so eloquently put it - people like you and I (cautious uncertainty) are probably on the high end of U.S. enthusiasm for this deal, which says a lot about where the rest of the country stands.

I think a compromise that might, possibly, maybe, be workable in Washington might include gradually raising the ownership limits on U.S. carriers by foreigners to 49% from the current 25%, but even that is going to take some major, major political arm-twisting, as Congress flipped out a few years back when the DoT proposed - just proposed - such a change.

Bush's term is almost at end, and he's not going to waste what little time/political capital he has left on such an (in the scheme of things) minor deal that would have implications for only a very narrow band of the electorate. Outside of A.net, most people in the U.S. couldn't care less what is going on with U.S.-E.U. bilateral negotiations, except that many would be furious if "Bush gives away rights to the [domestic airline] farm" were splashed across papers all across America. Not exactly something he's probably itching for in his last 18 months in office.

Same for whoever the next President is - Republican or Democrat. Whether its Rudy, Hillary, Barack, Mitt, John, John, whoever - they're all going to have much, much higher priorities than raising the ownership cap of U.S. airlines to 49%. That will probably right around number 3,493 on their list of priorities to tackle in the first term.

Again - nothing is going to change because there is absolutely no motivation or enthusiasm for a change on the U.S. side. The E.U. is now in the unenviable position of wanting things, but having nothing in return that the other side wants. Nobody in the U.S. cares about getting cabotage in the E.U. - from the U.S. perspective, it's a dead issue.
 
IADLHR
Posts: 612
Joined: Wed Apr 27, 2005 10:25 pm

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 2:26 am



Quoting Commavia (Reply 33):
I think a compromise that might, possibly, maybe, be workable in Washington might include gradually raising the ownership limits on U.S. carriers by foreigners to 49% from the current 25%, but even that is going to take some major, major political arm-twisting, as Congress flipped out a few years back when the DoT proposed - just proposed - such a change

I totally , totally agree. I also think the only way it will come about is when the next wave of proposed mergers of US carriers is announced or a US carrier airline folds. I think, under those circumstances that perhaps, maybe, possibly, that the US Congress will start to discuss raising the foregin ownership levels. How much they would increase it, if at all, is beyond me.
 
max999
Posts: 946
Joined: Fri Dec 09, 2005 11:05 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 2:39 am



Quoting FreequentFlier (Reply 32):
Any President (Republican or Democrat) who agreed to such a deal would be roasted by the labor unions, and probably by most non-union voters as well.

Not true for non-airline union voters.

I think one party that's been left out of this discussion are the flying public on both sides of the Atlantic. They are the REAL winners in an open skies deal.

This open skies deal is analogous to when the US domestic market was deregulated; albeit this is for the trans-Atlantic market. After deregulation, there were more choices and lower fares for everyone. I'm confident that in the long term, the consumer will see the best parts of this 'deregulation.'

So the President who agree to this deal will be lauded by the majority of voters.
All the things I really like to do are either immoral, illegal, or fattening.
 
commavia
Posts: 9626
Joined: Mon Apr 25, 2005 2:30 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 2:47 am



Quoting Max999 (Reply 35):
So the President who agree to this deal will be lauded by the majority of voters.

I don't think so, not by a long shot. That is "wishful" thinking about best, respectfully.

If voters were so rational as to see the benefits of globalization and liberalized, deregulated and opened markets, you would never have seen all of the Democrats swept into Congress last year largely on anti-globalization platforms (on other issues, perhaps, but not on that one). The truth is that populism is still alive and well in the U.S., and politicians - particularly Democrats - have very shrewdly capitalized on fears about foreigners "taking our jobs," "outsourcing America," etc. and all those other idiotic catch-phrases. As a result, even the most pro-trade Republicans and some Democrats are pretty much hiding under their desks on the issue.

That's why you saw all the uproar over DR-CAFTA, are seeing problems with Free Trade agreements in limbo with Peru and South Korea, etc., and let's not forget the ridiculous B.S. that was put out by certain anti-globalization "elements" (that means you, Lou Dobbs) about the Dubai Ports World deal, which was a good one for everyone, but wasn't sold to the public as such, and thus had no popular support.

Sure, people are always happy to get lower fares, but it would be really hard for even the most pro-trade politician to convince them that opening up the domestic U.S. air market would "lower fares" without "outsourcing America" and "giving foreigners our jobs," etc. I can only imagine the anti-globalization mobilization that would be rolled out to defeat that one.
 
vv701
Posts: 5773
Joined: Fri Aug 19, 2005 10:54 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 3:04 am



Quoting Avek00 (Reply 11):
I fully expect the Brits to pull out every stop -- legal, regulatory, commercial, and otherwise -- to derail Open Skies.



Quoting Ikramerica (Reply 13):
Now the new deal is signed, and if the UK doesn't want to live with it... well, that's their problem.

In response to the above and similar comments please first note that the first government to ratify the Open Skies agreement was the UK government. And I am quite sure that the British government will stick to the deal.

Secondly it is important to note those details of the agreement given by IADCA in Reply 7. What I seem to be hearing here is that the American government will not comply with Article 21 of the agreement and that many here will interpret this as the British breaking the agreement! But clearly Article 21 is just as much a part of the agreement as is free access to all American and European airlines to LHR.

What clearly separates the American and British governments over this issue at this point in time is that the prime concern of the British government is the travelling public while the prime concern of the American government is the American airline industry. And frankly I understand this. It is what you would expect to see. The British approach reflects the pressures of the British Parliamentary democratic process while the American approach reflects the pressures of the very different American democratic system.

If anyone really doubts that the British government's only concern is the travelling public when negotiating these deals then I suggest they look at the two Open Skies agreements it has recently signed independently of the EU, the first with Canada last year and much more recently that agreed with Singapore. This latter agreement is in my view a true model for an Open Skies agreement. It certainly allows one of the world's leading airlines (Singapore Airlines) full fifth freedom rights from the LHR to the USA subject only to the agreement of the American authorities. And it also allows that same airline or any other airline from Singapore to fly between any two points in the UK including full cabotage rights. In this case no further approval is necessary and such services could start with next year's summer timetable.

Confirmation of the above from the Singapore end of the agreement can be found in the Reuter's article 'Singapore says reaches Open Skies air pact with UK' at:

http://uk.biz.yahoo.com/03102007/325...eaches-open-skies-air-pact-uk.html

Here of course British airlines also get the same deal in Singapore even though the cabotage rights in a country with an area of only 240 square miles are not that valuable.
 
commavia
Posts: 9626
Joined: Mon Apr 25, 2005 2:30 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 3:12 am



Quoting VV701 (Reply 37):
the prime concern of the British government is the travelling public while the prime concern of the American government is the American airline industry.

Rolling on the floor, laughing my a** off. Wow, that's a good one - you should really do stand-up.  rotfl 

Quoting VV701 (Reply 37):
then I suggest they look at the two Open Skies agreements it has recently signed independently of the EU, the first with Canada last year and much more recently that agreed with Singapore.

Both of which, relatively speaking, are a drop in the bucket compared with the importance of the U.S.-U.K. bilateral aviation issue, which dwarfs the Canada-U.K. and Singapore-U.K. markets in size, value and prestige (and - minor detail - threat to BA and Virgin).

Quoting VV701 (Reply 37):
This latter agreement is in my view a true model for an Open Skies agreement. It certainly allows one of the world's leading airlines (Singapore Airlines) full fifth freedom rights from the LHR to the USA subject only to the agreement of the American authorities.

Yeah, it also helps that Singapore has no domestic market, and thus there really is no question of reciprocity, since Singapore knows that they would never have a domestic cabotage right to give up to the U.K. It also helps that the two countries are 14 hrs (schedule flying time) away, and thus the likelihood of any Singaporean airline ever flying domestic segments within the U.K. is quite low.

Beyond that, I agree that the reciprocal 5th freedoms are a good model to follow - although, in fairness, that is exactly what the U.S.-E.U. agreement at issue already allows.
 
Bongodog1964
Posts: 3069
Joined: Wed Oct 18, 2006 6:29 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 4:16 am



Quoting Commavia (Reply 19):
It's not "most" people. It's "all" people, at least all rational people. The U.K. knew full well - or at least should have known - what this agreement was: this was it. It was a done deal. Sure, they can come back and keep talking, blah, blah, blah, but there is absolutely no way whatsoever in the current political environment in the U.S. that the U.S. will ever agree to cabotage. Not going to happen. The U.K. knows it.

Here in the UK we are taught that it is better to lose in a honourable way, than win in a dishonourable way; signing agreements with every intention of not adhering to the clauses, would normally be deemed dishonourable.

Quoting Baexecutive (Reply 27):
Coming from the British, even using the words "US carriers" and "protectionism" in the same sentence seems like a joke. The British carriers - BA in particular - are among the most closely guarded and heavily protected on earth. Just witness what has transpired in the last 18 months regarding Heathrow: the U.K. government has gone nuts over the possibility that BA may face competition on their prized U.S.-Heathrow routes, which make up a substantial portion of their profits (and for good reason).

Quite where has the UK government been when they have been "going nuts regarding LHR" in the past 18 months ? Here in the UK they have barely mentioned LHR or open skies. One could be forgiven for thinking that all the jingoism on the subject is originating on the other side of the pond.

There seems to be an attitude of "you know we are a bunch of protectionists who go back on our word, so what are you complaining about" running through this thread.
 
commavia
Posts: 9626
Joined: Mon Apr 25, 2005 2:30 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 4:26 am



Quoting Bongodog1964 (Reply 39):
Here in the UK we are taught that it is better to lose in a honourable way, than win in a dishonourable way; signing agreements with every intention of not adhering to the clauses, would normally be deemed dishonourable.

Who's not adhering to anything?

They way I read/understand the agreement, the U.S. agreed to begin discussions/negotiations on Phase 2 within a set period of time. I've seen nothing that says they won't strictly adhere to that.

The agreement does not, on the other hand, promise anything from the U.S. side in terms of cabotage, etc. - those are all things to be negotiated in said discussions.

What, exactly, is the U.S. "dishonorably" not adhering too?
 
kanebear
Posts: 852
Joined: Tue May 28, 2002 12:06 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 5:00 am



Quoting BY738 (Reply 14):
So US carriers are not not cherry picking the lucrative transatlantic routes.....
Yes its all about competition. Or current lack of it.

Yes, from the UK side. BA has the ability at unserved points to switch services from LGW to LHR. No US airline has that capability and it's a sure bet BA serves every such point to ensure that doesn't happen. Given that LHR is a hub for BA, that's an unfair advantage straight away. Why we ever signed Bermuda II I'm unsure. It's positively the most lopsided 'bi-lateral' ever conceived as it gives the US no benefit whatsoever while doing a bang-up job protecting LHR. I'm sure UK carriers are pitching a fit over it, save BMI who stand to finally be able to compete on TATL.

Quoting AirNZ (Reply 26):
Sorry, but that's what it's all about. If certain US carriers can't compete in the open market then get out of it.....how much protectionism do they need? In other words, the same old story, give US carriers unfettered rights to whatever/wherever they want, as long as they are protected in their home market.

Even UK carriers don't serve UK destinations... there's 'the letter of the agreement' and then 'the spirit of the agreement'. Can you honestly say that cabotage in the UK is equivalent to cabotage in the US? If UK carriers were required to route-match to connecting points as well as certain specific routes, that'd be different and I'd actually be ok with that. But to have BA flying LAX-MIA-LHR whilst someone else has to fly the unprofitable smaller legs will cause massive disruption in the US market. Your smaller points will likely lose service. Without a rail network in place, the only option will be driving hours to a gateway airport. You see this as 'not able to compete'?

Quoting Baexecutive (Reply 31):
I don't see any harm in opening up LHR to competition, BA will continue to flourish whatever happens as 'service' wise they wipe the floor with US carriers.......

Used to... perhaps you speak of free drinkies down the back?? In the pointy end where it matters, BA have fallen quite far. US carriers are improving their products and it wasn't so long ago (2000-2001) that I had truly excellent TATL flights in F on a US carrier (AA) in a seat that bettered BA's. The standard on AA lagged BA's quite a lot at that point. Yet the AA standard then is higher than BA's now.

Quoting Commavia (Reply 38):
Yeah, it also helps that Singapore has no domestic market, and thus there really is no question of reciprocity, since Singapore knows that they would never have a domestic cabotage right to give up to the U.K. It also helps that the two countries are 14 hrs (schedule flying time) away, and thus the likelihood of any Singaporean airline ever flying domestic segments within the U.K. is quite low.

See above... even the UK carriers don't fly to a lot of destinations. Why would anyone else want to???

Quoting Bongodog1964 (Reply 39):
Here in the UK we are taught that it is better to lose in a honourable way, than win in a dishonourable way; signing agreements with every intention of not adhering to the clauses, would normally be deemed dishonourable.

I think it quite dishonourable and very teddy-out-of-pram'ish for the UK carriers to be making noise and attempting to derail an agreement that the US wouldn't even be able to violate for over a year no matter what they did.
 
kanebear
Posts: 852
Joined: Tue May 28, 2002 12:06 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 5:03 am



Quoting Bongodog1964 (Reply 39):
There seems to be an attitude of "you know we are a bunch of protectionists who go back on our word, so what are you complaining about" running through this thread.

And a RR slot for you for being so circumspect about the UK position.
 
IADCA
Posts: 1346
Joined: Mon Feb 26, 2007 12:24 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 5:21 am



Quoting Commavia (Reply 40):
They way I read/understand the agreement, the U.S. agreed to begin discussions/negotiations on Phase 2 within a set period of time. I've seen nothing that says they won't strictly adhere to that.

Well, what the Brits fear is that they won't negotiate in good faith. The negotiation clause almost definitely means in good faith, though, as it would be virtually meaningless if it didn't. But because the present deal leaves the US bargaining from a strong position, they can be pretty hard-line without violating such a standard. Another thing about the structure of the agreement that is favorable to the Americans is that they can push their aims much more privately than the British. The two parties are not at all on equal footing in terms of the agreement, as the US is a full party and the Brits just a small share of the European side of things. Therefore, the Brits have to either convince the rest of the EU to see things their way and throw their collective weight around (nope) or look like total obstructionists by whining publicly if they want to get their way.

As several people have pointed out ably, the US already has most of what they want, and little of what they don't. Cabotage is almost a total non-starter, as the US airlines already have rights on the vast majority of intra-EU routes. Honestly, how many markets are there within individual EU nations that say AA would want to fly? That leaves ownership restrictions and labor as the big issues really left on the table. It'd be pretty damn hard to get anything through Congress that would allow even de facto control of US carriers to be feasible. Considering VX has pretty substantial foreign influence at 25% ownership, 49% would be damn hard to sell. What's actually more of a problem politically though is the increasingly visible foreign ownership of traditionally American entities across other industries.

Labor is a bit of an X-factor right now. How the economies are fairing and the Euro/dollar balance when it comes time for Stage II negotiations will have a big bearing on whether anything is possible there. But the question remains, what does the EU have that the US wants in any deal that they don't already have?

I thought it was rather inconceivable that the EU countries would agree to a deal in the first place without at least some cabotage rights or ownership restrictions. Now the question is whether the Brits have enough ammo to try to force the US to essentially re-negotiate the terms already in the agreement. After all, if the US already has more or less what they want, anything agreed to in Stage II would essentially just be a re-negotiation from their standpoint...
 
kellmark
Posts: 542
Joined: Thu Dec 21, 2000 12:05 pm

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 5:28 am

Something that nobody has mentioned in this discussion but which is very important is the difference in safety standards between the US and the EU. All US carriers under Part 121 must have certified, trained aircraft dispatchers who do pre flight planning and in flight monitoring to ensure that the flight crew gets all necessary information, both preflight and during the flight, with their own communication system. Jar-Ops has nothing of the kind. And there have been a number of accidents and incidents in the EU that have highlighted this problem. Most air carriers in the EU do not even monitor their flights and do not know where they are during flight. As a result, aircraft have run out of fuel, run into hazardous weather and continued flight in a severely degraded condition when it simply wasn't necessary.

There is no way that any European air carrier should be allowed to operate as cabotage within the US when they don't even meet basic US safety standards.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 6:20 am



Quoting AirNZ (Reply 25):
Correct me if I'm wrong, but wasn't this precisely what all the whinging was about from Americans regarding Bermuda II?
It was a bi-lateral treaty negotiated and ratified by the US government, but yet always conventiently portrayed an a British invention.

It was agreed to by the US, because the UK announced they were going to pull out of the original Bermuda agreement, a far less restrictive agreement than Bermuda II. Can you name anything significant the US got out of the agreement?

Let's see what the UK has to say about the agreement:

http://www.dft.gov.uk/pgr/aviation/glossaryofusefulterms

Bermuda 2: UK/US air services agreement negotiated in 1977 which superseded Bermuda 1 in order to redress the balance of air service advantage, which at that time lay with the US, by limiting the number of airlines that could be designated to operate on certain routes and the over-provision of capacity by some US carriers.

http://www.parliament.the-stationery...00/cmselect/cmenvtra/532/53206.htm

9. As time went on, the liberal nature of the Bermuda Agreement began to be questioned. It became clear that airlines based in the United States had become more powerful than those in the United Kingdom, and derived significant benefits from their exclusive access to the US domestic market.[32] For example, in the 1960s US airlines began to develop the practice of combining non-stop trans-Atlantic services from 'gateway' airports in the United States with feeder services from cities within that country: the beginnings of the so-called 'hub and spoke' system.[33] Thus its "privileged access to a major part of the US market" led to "the growing dominance of the US airline industry",[34] which was reflected by the fall in the share of the market between the United States and the United Kingdom operated by British carriers[35] from 37.8 per cent in 1961-62 to 30.9 per cent in 1966-67.[36] In response to concerns about the dominance of United States airlines, and wishing to offer more rights to operators of non-scheduled services, the British Government announced in 1976 that it intended to renounce the Bermuda Agreement. A new round of bilateral negotiations resulted from that decision, leading to the conclusion of the Bermuda II agreement in 1977, which came into force in 1978.[37]

Quoting AirNZ (Reply 26):
Sorry, but that's what it's all about. If certain US carriers can't compete in the open market then get out of it.....how much protectionism do they need? In other words, the same old story, give US carriers unfettered rights to whatever/wherever they want, as long as they are protected in their home market.

The market between the US and LHR does not belong to the UK, it is a UK and US market. The US has as much right to say who gets to operate in that market as the UK. For too long the US has allowed the current air services agreement continue despite radical changes in the US market and US airlines. It probably would have been rejected several years ago except for the confusion stemming from whether the EU only had authority to negotiate a new agreement.

Quoting VV701 (Reply 37):
What clearly separates the American and British governments over this issue at this point in time is that the prime concern of the British government is the travelling public while the prime concern of the American government is the American airline industry. And frankly I understand this. It is what you would expect to see. The British approach reflects the pressures of the British Parliamentary democratic process while the American approach reflects the pressures of the very different American democratic system.

Ha. Despite years of high UK-US fares, the UK government did not seem particularly concerned. And the Bermuda II, another reflection of the "British Parliamentry democratic process" was clearly intended to protect British airlines not the travelling public. In contrast, the US has been signing open skies agreements with virtually every other country under the sun that allowed any carrier from the other country operate as many frequencies to any city in the US they were interested in. And it did this in a strong dollar environment that favored foreign carriers with lower costs because it benefitted consumers and increased business and tourist traffic.

Quoting VV701 (Reply 37):
This latter agreement is in my view a true model for an Open Skies agreement. It certainly allows one of the world's leading airlines (Singapore Airlines) full fifth freedom rights from the LHR to the USA subject only to the agreement of the American authorities.

SQ already has an open skies agreement with the US which says they can carry traffic from intermediate points to the US, so I presume they can fly fifth freedom routes to the US via other countries as well. At least that is what the US-India agreement allows.

Quoting VV701 (Reply 37):
Here of course British airlines also get the same deal in Singapore even though the cabotage rights in a country with an area of only 240 square miles are not that valuable.

I would say the cabotage rights of minimal value in the UK as well. Where is SQ going to fly a 787, A350, 777, 747, or A380 to from LHR in the UK? Even with change of gauge would it be worth an additional pair of LHR slots? BA doesn't seem to think extensive flying to the rest of the UK from LHR is all that great a use of their LHR slots.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
pixuk
Posts: 305
Joined: Wed Dec 17, 2003 8:44 am

RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 8:02 am



Quoting Ikramerica (Reply 13):
To retaliate against VS, that's why. VX is already on thin ice by not strictly adhering to their approval and having SRB much more involved. Since VS is the lead dog on this fight, it would seem that he really does want VX to just be part of the Virgin brand and not really be American.

Really not sure why you insist on perpetuating this myth that VX is a British airline. Branson has a minority stake, and very little influence on the operation - the DOT have seen to that.

The airline has Virgin plastered across the side of it because the investors see that brand as attracting customers. Much in the same way that merchandising deals are done with Disney. Do you also believe that Disney are actually cooking your Toy Story Happy Meal, or just licensing their brand to make it more attractive to target consumers?
 
AirframeAS
Posts: 9811
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 8:24 am



Quoting AirNZ (Reply 23):
Why? VX is an American company...

Barely. Very, very, very borderline and pushing it. VX is still being watched very closely by the D.O.T. and the F.A.A.

Quoting AirNZ (Reply 23):
.....as determined by your own authorities.

With conditions. If VX, later, does not meet those conditions, their certificate could and will be pulled at anytime without warning.

As for the thread... I feel that what the UK carriers want to accomplish is to enter the U.S. market and wipe out every single U.S. airline to death. That, is what I am very concerned about AND I oppose any open sky agreements. The way we do things here in the U.S. is not done the same way that the Europeans do things, vice versa.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
ANother
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 8:34 am

Cabotage? Why is everyone on about cabotage?

What the Europeans would like is a relaxation of ownership and control rules on the US side to (at least) equal the current rules on the EU side. They in fact favour going even further.

If you are not familiar with this the rules are 'majority' ownership of EU airlines by EU nationals - majority being 50% (voting and equity) plus 1 share. There are no 'control' restrictions. A US citizen could be CEO of an EU airline or the nationalities of Board members could be from anywhere. Some in the European Commission favour removing the 50% ownership restriction provided it is reciprocal. Safety oversight would remain with the EU country where the airline is based. National labour laws would also apply

In the US 75% of voting stock (51% of equity) must be in US citizen's hands. Majority of Board members, the CEO and many other executives must be US citizens. (This US citizen requirement is a funny one as well, as the VX CEO who held a US passport, was determined not to be a US citizen because the person that hired him wasn't one).

At the same time the EU is on record of favouring unlimited 5ths, 7ths, 8th and 9th freedoms (or in fact taking the intra-EU complete open-skies model and applying it to EU-US). In other words any US or EU carrier could fly between any two airports in the US/EU, and between any airport in the US/EA and any other airport, without restrictions.

Just like Coca-cola or Phillips are free to do business anywhere, so would the airlines. Sounds pretty good to me.

Just as an aside - whenever I'm tempted to buy a Coke, or an iPod or other US products I think of the views expressed in this forum. Makes me wonder sometimes.
 
commavia
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Wed Dec 05, 2007 9:21 am



Quoting ANother (Reply 48):
Cabotage? Why is everyone on about cabotage?

Because that's what the E.U. have repeatedly said they want.

Quoting ANother (Reply 48):
What the Europeans would like is a relaxation of ownership and control rules on the US side to (at least) equal the current rules on the EU side.

And that - as I said - is I think something they might realistically be able to get. At least on the ownership front. I think we could see the U.S. perhaps raising the ownership cap up to 49%. It would be next-to-impossible to get approved by Congress, but with some political arm-twisting (fat chance) it could be done, whereas full cabotage and unrestricted ownership rules would be politically impossible. Just impossible. Period.

Quoting ANother (Reply 48):
(This US citizen requirement is a funny one as well, as the VX CEO who held a US passport, was determined not to be a US citizen because the person that hired him wasn't one)

Not quite.

Reid had to leave not because he was a U.S. citizen or wasn't, but because they felt that he was too closely tied to Virgin's "questionable" (at least according to some, like CO) owners - foreign owners, at that, allegedly.

Quoting ANother (Reply 48):
At the same time the EU is on record of favouring unlimited 5ths, 7ths, 8th and 9th freedoms (or in fact taking the intra-EU complete open-skies model and applying it to EU-US).

Of course they are, as the E.U. knows they'd have to give up essentially nothing in the deal, whereas the U.S. stands to lose quite a bit.

Quoting ANother (Reply 48):
In other words any US or EU carrier could fly between any two airports in the US/EU, and between any airport in the US/EA and any other airport, without restrictions.

Nice in theory, but of course, in practice, we all know that's not how it would go. There is virtually no airport in all of Europe serving a major urban population center - name me one - that is not heavily slot-restricted and/or capacity-controlled. In that environment, U.S. carriers would have a pretty hard time flying between any two airports in Europe.

Quoting ANother (Reply 48):
Just like Coca-cola or Phillips are free to do business anywhere, so would the airlines.

One slight difference: Coke and Phillips really can do business anywhere. The same would not be true of U.S. carriers trying hopelessly to get a toehold in Europe.

Quoting ANother (Reply 48):
Just as an aside - whenever I'm tempted to buy a Coke, or an iPod or other US products I think of the views expressed in this forum. Makes me wonder sometimes.

You give me Coke and Apple, I opine: Toyota, Sony, Nestle, Shell, GSK, and LG, to say nothing of BA, Air France, Lufthansa, and Airbus. All of these companies - and thousands more - are foreign (non-U.S.) and yet do enormous business in the United States.

Last year, more than $175 billion of foreign capital flowed into the U.S., and nearly $220 billion flowed out. In addition, hundreds and hundreds of thousands of U.S. jobs are tied to foreign employers and subsidiaries of foreign employers operating in the United States.

Please - let us not turn this into a pissing match about which is more economically "open." Civil air transportation notwithstanding, the United States has one of the most open and liberalized economies on earth.