EU/US To Do Mini Deal, Leaving Bermuda II Alone

kaitak · Sat Oct 25, 2003 1:33 am

According to today's ATW news, the EU and US are to do a mini deal, which would bring about open skies, but would leave the contentious issue of access to Heathrow out. There are still some problems to be ironed out, such as the fact that under the proposal, no European airline could fly from LHR to the US, but UK carriers could fly from European points to the US.

This is very good news from an Irish perspective too, as our crazy Shannon stopover policy is likely to go too, giving Aer Lingus unlimited access to US markets.

There is supposed to be a meeting of the two sides in December, so let's hope a deal can be done then.

PHX Flyer · Sat Oct 25, 2003 2:29 am

In my humble opinion, as long as free access to Heathrow is not available to all airlines, UK airlines should simply be excluded entirely from this deal. Obviously, the pressure on BA to relinqish slots in return for broader, more effective cooperation with other airlines is not strong enough yet. Time to tighten the thumbscrews a lil' more ...

copaair737 · Sat Oct 25, 2003 2:32 am

So will EI start services to MIA and SFO this spring or summer now that the SNN stopover is gone?

Guest · Sat Oct 25, 2003 2:42 am

I have to agree with PHX Flyer, even though I'm British! I think Heathrow should be fully opened to competition and BA should be forced, kicking and screaming if necessary, to relinquish the masses of slots it has accumulated over the last few years in a cynical attempt to stifle competition. And let's not feel sorry here for Virgin Atlantic, who have been equally vociferous in recent years in attempting to keep out transatlantic competition from LHR.

kaitak · Sat Oct 25, 2003 2:42 am

It hasn't gone yet, but I think that if it does go in time for next Summer, it will allow these flights to go ahead and more the following year.

It's strange that the biggest obstacle to EI's transatlantic development has been its own principal shareholder, the Irish government. They had a chance to do this voluntarily, but now it's going to be forced on them.

aaway · Sat Oct 25, 2003 2:59 am

Kaitak,
Forgive my ignorance. I was under the impression that the Irish government had indeed overturned that archiac policy once it realized the extent of the hindrance being placed on EI. Thought your gov'ment had decided to do this during the 1998/99 timeframe.

bobrayner · Sat Oct 25, 2003 3:07 am

I think this is a step in the right direction, even though Heathrow has been left out.

worldtraveler · Sat Oct 25, 2003 3:15 am

This paragraph is most telling:

While France may abstain from a sharp reaction to the EC mini-deal proposal in return for "easy" treatment from EC regulators of its recently announced merger with KLM, other European countries may well object.

There is no way LH (and alot of other carriers) is going to allow BA access to their markets w/o gaining something from the British.

This proposal is DOA unless the British are carved out and probably crafted by the US to force the continental European airlines to put pressure on the British gov't. Every European carrier wants access to the key European - US markets but won't get it until the LHR issue is addressed.

It will be interesting to see how intra-European services are affected when Euro carriers are given the opportunity to fly to the US from other than their home countries. AZ, for example, may think that their FRA slots are more valuable flying from FRA-JFK than from, say, FRA-FCO.

aaway · Sat Oct 25, 2003 3:43 am

I do see the potential for pressure from other EC members. Undoubtedly the threat of cross-border consolidation of the airline industry in Europe will ultimately lead to the UK liberalizing LHR. AF-KL gets approved, competetive pressure mounts on BA, then BA seeks a partner. The most lucrative partners for BA are those located in EC member-states where the EC would have, at least, some jurisdiction over the pairing.
IMO, I don't see an "out" for BA, or the UK. Without a merger partner, BA becomes marginalized. BA will have to obtain a partner. The EC will set the cost for said partnership as LHR access for other European carriers.

worldtraveler · Sat Oct 25, 2003 4:05 am

I totally agree, Aaway. Bring it on.

copaair737 · Sat Oct 25, 2003 5:58 am

the UK isnt even in the EU, so why would they even be affected?

ahlfors · Sat Oct 25, 2003 6:03 am

Copaair.... The UK IS in the EU. They just chose not to join the common currency nor the Schengen treaty. By the looks of it, actually, looks like the EU country that is least commited to European integration is getting the best deal here.

aaway · Sat Oct 25, 2003 6:07 am

External machinatons leading to internal changes. The UK will want to "protect" BA as much as possible. Granted, BA is no longer state-owned, but nonetheless is essentially Britain's flag carrier. BA also means employment for Britons. I believe the UK will concede LHR access to EU carriers if BA is the successor in a merger, and needs the rights to fly transatlantically from an airport outside of the UK but within the EU.

[email protected] · Sat Oct 25, 2003 8:19 am

There is no way the British government will agree to any deal that compromises BA, VS or BMI, the 3 biggest British airlines in any way, specially BA, it employs thousand of Brits in the UK and is vital to the local Heathrow economy. BA is the UK's flag carrier, and the Bermuda 2 agreement could have been sorted out many years ago, but negotitions have always reached a dead end everytime the US and UK authorities sat round the table.

ConcordeBoy · Sat Oct 25, 2003 8:32 am

rather ironic that the country least interested in pan-European integration, is the one who stands to benefit the most from such an arrangement Laugh out loud

donder10 · Sat Oct 25, 2003 8:34 am

BA are 'hording' LHR slots to allow them roughly the same % of slots at their home base as LH,AF etc so they are in a strong position when they might neede to cede some slots to DL,CO etc.But also,VS must too.

masseybrown · Sun Oct 26, 2003 1:47 am

Kaitak, I flew EWR-DUB early in the month on Continental. The EWR-SNN flight was departing from the adjacent gate and both aircraft were departing full. Admittedly the SNN flight was a smaller plane; but it seems that a distinct and viable SNN market has developed from the US. The Continental rep said both flights regularly carry excellent loads.

aaway · Sun Oct 26, 2003 2:13 pm

[email protected]LHR,
In the current environment, I'd agree with you wholeheartedly. However, the process of consolidation in Europe will cause the protectionist stance of the UK to evolve.
If AF-KL gets the nod, it's likely AF is the successor. AF gets 2 gateways: AMS and CDG. IF AZ somehow gets aboard, then MXP is added. Will BA (and for that matter) LH seek partners. You bet!!!
If what is evolving in EUrope is truly the future of commercial aviation, then the governments of the surviving players - most likely AF, BA, LH - will have to drop position of protecting "homogeny" for their carriers: "BA waving the flag for Britain, or LH waving the flag for Germany". Consolidation will result in considering the welfare of these carriers on a transborder basis.
Think about it, the combined AF-KL (perhaps AZ) gives AF beachheads in northern, central and southern Europe. I wouldn't expect BA to sit idly by. If BA does indeed seek IB and SR as merger partners (which has been rumored), I cannot fathom the EU's approval, in light of this new aviation accord, if the UK continues to be protectionist toward BA/LHR.

PVD757 · Sun Oct 26, 2003 5:18 pm

I think that the final say in LHR and full access will wind up in the hands of the Brittish public. There was public pressure regarding the future expansion at the London airports. Now a decision needs to be made. Do they want protectionism or open market travel to the US? I think that it would be in the best interests to find a way to open the marketplace up without the environmental concerns dragging down the quality of life too far down.

RickB · Sun Oct 26, 2003 6:11 pm

The perfect solution at LHR is simply to expand the Bermuda II treaty - allow any of the 4 nominated airlines to fly to any US destination from LHR and then increase the number of nominated airlines to 6 - 1 additional airline from the UK and the US.

In the meantime Europe should be told where to go !! It has everything to gain from opening up LHR and the UK nothing !!

RickB

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