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scotron11
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EU/US OpenSkies: Who Wins?

Mon Mar 05, 2007 6:01 pm

British Airways is already sounding off on the tentative agreement reached by the US/EU last week about opening up the US/EU aviation market, and has said they will lobby the UK government against the deal.

VS didn't sound too happy either. (Forbes,LondonTimes etc)

The reason they are unhappy is because they think they'll have to give up slots at LHR to accommodate additional US carriers.

Protectionist BS if you ask me. And why would they feel they have to cede any slots? They also say that the deal favors the US over them. What do others think?
 
JAL777
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 05, 2007 6:32 pm

Did they make any headway on US foreign ownership rules??
 
kiwiandrew

RE: EU/US OpenSkies: Who Wins?

Mon Mar 05, 2007 6:36 pm

I think the consumer wins - the airlines from both sides will bitch and moan of course that it didn't give them everything they wanted - get used to it - that is the way the world works ( and generally speaking if both sides feel equally ripped off then it is a good deal Big grin )
 
scotron11
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 05, 2007 7:39 pm

Quoting JAL777 (Reply 1):

Did they make any headway on US foreign ownership rules??

They haven't made any of the details on ownership public, but as of now the 25% voting equity still stands.
 
FlySSC
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 05, 2007 8:01 pm

Quoting Scotron11 (Thread starter):
EU/US OpenSkies: Who Wins?

Considering the domination of European Airlines (particularly BA/AF/LH) on the EU-US market, considering the financial situation of these airlines compared to their US competitors/partners, considering the "image" and reputation of those European airlines compared again to their US competitors/partners, I would say that European airlines have much more to win in this open sky agreement.
 
B777ER
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 05, 2007 8:35 pm

On a side note, BA shares fell today due to the Open-Skies issue. Survival of the fittess I say.
 
ikramerica
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 1:16 am

Quoting JAL777 (Reply 1):
Did they make any headway on US foreign ownership rules??

I think we would have heard more about that, but since it doesn't actually have anything to do with open skies and was one of the red herrings thrown out by BA to justify restricting LHR, I doubt it will have changed much.

BA stock is down 6% today.

I doubt BA (or VS) would have to give up slots, but they know someone will sell them to CO and DL, two carriers that offer a better J class product than BA (more room, first class service). With UA cutting down JFK-LHR, BA was pretty happy to have so much of the NYC share, but DL and CO would both fly NYC-LHR (JFK and EWR respectively). DL would also start ATL and possibly LAX, CO would obviously do IAH. And let's not forgot AA and DFW.
Of all the things to worry about... the Wookie has no pants.
 
r2rho
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 1:29 am

There have been so many failed attempts at an Open Skies agreement that I remain highly critical. Even if they do reach a final agreement, it might be so full of exceptions, small writing, patched-up sections etc that you can hardly call it a true Open Skies agreement. We'll see what happens in the end.

I don't want to sound overly pessimistic - I dream about a US-EU Open Skies agreement, as the winners would clearly be the customers on BOTH sides of the Atlantic. But it's been going on for too long without reaching any results...
 
Humberside
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 3:47 am

Who wins - Dublin, Aer Lingus, bmi, DL, CO, NW, US, ... most of the parties involved

Quoting Scotron11 (Thread starter):
The reason they are unhappy is because they think they'll have to give up slots at LHR to accommodate additional US carriers.

Slots at LHR are allocated by a private company - Airport Co-ordination Limited. Short of that company being nationalised or some lengthy and complicated court action, BA or VS could not be forced to give up LHR slots. New entrant airlines will have to buy slots, or use existing ones if they aleady have them
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kaitak
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 4:07 am

There's been a lot of talk today about the effect on BA and of course, its shares are down, BUT it would be unwise to judge Open Skies solely because of the effect on BA shares (VS is of course untraded, being owned by RB and SIA) .

Does Britain actually lose? Sure, there will be more competition to/from LHR and that will hit the two main airlines, but I suggest that the overall effect on the UK economy will be positive. The question is, will the UK Govt take note of the overall effect. I sincerely hope so. Sure, there are aspects which the UK in particular does not like, but will rejecting the deal as a whole bring these concessions any closer? Clearly not; indeed, if anything, I think the response from the US will probably be a hardening of attitudes, with the possibility of notice being given of the revocation of Bermuda 2.

There is still a lot of confusion in the media as to whether the voting at the EU Council meeting will be done based on unanimity, which causes problems, or on the Qualified Majority basis; the latter would be better, but I fear the former is actually the case, in which case ONE country could ruin things for everyone else.

What interests me, in particular, is what will happen if the Brits throw a spanner in the works. The Commissioner is travelling to all EU countries to advocate acceptance; he won't have any problem in that regard in Dublin, when he visits there. The real question for Ireland will be, having asked the Irish to accept it (which they will), what will happen if Britain rejects it; the Irish will want to know if they will then be able to proceed directly to negotiations with the US, to bring their deal forward. The Irish did a side deal in Nov 05, which was to have taken effect with the initiation of Open Skies, but since this is obviously delayed, we want to get this under way.

Also, if the UK does reject it, there is going to have to be a lot of thought put into how we avoid this situation in future, because unless there is a sea change in the EU's approach (for example, the "one size fits all" approach, where no-one has a deal until everyone has a deal), as we could be back in the same situation in 2,4 or 8 years time and one country should not be allowed to hold everyone else back.
 
Flyboy1108
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 4:12 am

Quoting Kiwiandrew (Reply 2):
I think the consumer wins - the airlines from both sides will bitch and moan of course that it didn't give them everything they wanted - get used to it - that is the way the world works ( and generally speaking if both sides feel equally ripped off then it is a good deal )

Hahaha great reply. I totally agree
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Danny
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 4:36 am

Quoting Ikramerica (Reply 6):
CO and DL, two carriers that offer a better J class product than BA

I would never pick CO or especially DL business product over BA. But it's a traveller choice so the deal can only be good for travellers.

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scotron11
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 4:47 am

Quoting B777ER (Reply 5):

On a side note, BA shares fell today due to the Open-Skies issue. Survival of the fittess I say.

Yes. but the main reason was because the disposal of BAConnect was costing them an additional £20M.

But I agree with the latter. And quite honestly, BA does have a good F & J product, able to compete with anyone. But, I think their main worry is that the "premium" that LHR commands will evaporate with the addition of CO, DL etc.
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 6:09 am

Quoting Humberside (Reply 8):
BA or VS could not be forced to give up LHR slots.

This remains a matter of semantics. They can't be forced to give up slots, but they could easily be penalised in other ways. For example, the US Department of Justice would determine that Open Skies, until CO/DL/US/NW have enough Heathrow slots, makes the BA/AA alliance through oneworld and codesharing anti-competitive, and order them to cease cooperation -- or be fined -- until such time as CO/DL/US/NW have enough Heathrow slots to satisfy the DOJ.

But does BA have to give up the slots? No, of course not. They can simply cancel their codeshares and reciprocal arrangements with AA, for example.

But the real result would be that they would end up giving up slots.

If you don't believe such things can be "forced" from a practical perspective, just look at what Microsoft has had to do -- and pay -- to make the EU Commission happy.

Steve
 
rdwootty
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 6:45 am

It seems amazing that the situation means that The US will have all the benefits and Uk airlines seem to be losing out all round?This relates to Virgin America and the possible demise of the BA/AA code share both of which are seen to be beneficial to the customer. Is the customer not King, maybe not just big business.
 
LipeGIG
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 1:51 pm

The customer wins, but IMO the question is for how long. If airlines loose their profitability, for sure in the future the profitable and competitive airlines of today will in the near future annihilate their competitors which also will drive the market for a strong process of consolidation. Less players will mean higher fares in the future.

In 10 years will be hard to see a start-up company because the "big" players will be even stronger and can block the access of the market for the little or new ones.

Who will survive ? no one knows!
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flyabunch
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 2:00 pm

Why does there need to be "sides", and why does someone need to win? I think it would be great if all sides won.

I realize this concept is pretty radical...but worth a try.

Mike
 
ikramerica
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 2:20 pm

Quoting Danny (Reply 11):
I would never pick CO or especially DL business product over BA. But it's a traveller choice so the deal can only be good for travellers.

By the time DL is flying into LHR, they will offer flat beds in their BE cabin, and since it's the "top class" on DL, the service is better than "second class" on BA.

As for CO, you are showing the 767, not the 777, with 170 degree recline seats that are 22" wide, and CO will be flying 777s into LHR without a doubt. I'd also expect CO to have a new premium product with the 787 introductions. And again, with BF being the premier class on CO, they don't hold anything back in terms of service, while three class carriers tend to do that.

And you don't have to face backward on either CO or DL.

But it is a matter of choice, as you say. Just compare the right apples to the right apples, please.
Of all the things to worry about... the Wookie has no pants.
 
RedEye
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 06, 2007 2:23 pm

Quoting Danny (Reply 11):
I would never pick CO or especially DL business product over BA. But it's a traveller choice so the deal can only be good for travellers.

BA is generally perceived as having the better seat, while CO has the better food and service. Quite a few people actually prefer CO's wider seat as well, even though it is not flat.
 
masseybrown
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 1:51 am

Quoting Sllevin (Reply 13):
This remains a matter of semantics. They can't be forced to give up slots, but they could easily be penalised in other ways. For example, the US Department of Justice would determine that Open Skies, until CO/DL/US/NW have enough Heathrow slots, makes the BA/AA alliance through oneworld and codesharing anti-competitive, and order them to cease cooperation -- or be fined -- until such time as CO/DL/US/NW have enough Heathrow slots to satisfy the DOJ.

I admire the active approach you take, but this would restart the War of 1812. From the US point of view, however, the EU is probably a better ally than Napoleon was.  Wink
 
rdwootty
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 1:55 am

The UK press are having a field day in respect of the "" Onesided" aggreement. Sections are blamiing the drop in BA shares on this however this was on one of the worst days for sharedrop anyway!!Certaiinly from the UK point there does seem an inbalance so it shows that Europe does not really care about us.
 
steeler83
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 2:38 am

Quoting FlySSC (Reply 4):
Considering the domination of European Airlines (particularly BA/AF/LH) on the EU-US market, considering the financial situation of these airlines compared to their US competitors/partners, considering the "image" and reputation of those European airlines compared again to their US competitors/partners, I would say that European airlines have much more to win in this open sky agreement.

I agree with this. The European airlines do have a bit of domination on EU-US flights, and people aren't really limited to flying into LHR, or CDG, or FRA on the big airlines. They will be able to fly to alternate airports the way I see it. It gives consumers an alternative on airline, as well as airport destiny selection.

Quoting Humberside (Reply 8):
Who wins - Dublin, Aer Lingus, bmi, DL, CO, NW, US, ... most of the parties involved

And as I mentioned above, along with several others on here, the consumers win...
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ti717
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 3:37 am

I think that BA might be scared of the other European airlines. CO and DL do not have slots but KL-AF and LH have them and under this agreement could use them to fly to the US. Just think if you were flying to LHR to NYC you could not only have BA, VS, AA, UA (See below) US CO & DL(if they buy slots) but AF, KL, LH and Adria Airways • Aer Lingus • Air One • Air Malta • Austrian Airlines • bmi • Brussels Airlines • Croatia Airlines • Czech Airlines • Cyprus Airways • Finnair • Iberia Airlines • Icelandair • Jat Airways • KLM • LOT Polish Airlines • Luxair • Malév Hungarian Airlines • Olympic Airlines • Scandinavian Airlines System • Spanair • Swiss • TAP Portugal • TAROM • Turkish Airlines.

Just think how some smaller carrier (lower costs) from the EU would love to be able to fly LHR-JFK. The market would become so splinted.

As I write this I just think about who made out like bandits, UA, DL spent tons of money for UA rights to fly LON-NYC and within a few years the rights will be worthless.
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kiwiandrew

RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 4:09 am

Quoting Ti717 (Reply 22):
As I write this I just think about who made out like bandits, UA, DL spent tons of money for UA rights to fly LON-NYC and within a few years the rights will be worthless.

actually IIRC there was an initial payment plus 3 or 4 additional annual payments which become void if Open Skies happens
 
r2rho
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 4:12 am

I don't understand how you're centering this debate all around LHR slot rights. This is NOT what the US-EU Open Skies agreement is about! Perhaps this thread should be renamed US-UK Open Skies agreement? You're missing the big picture here...

A true US-EU open skies agreement, if done correctly (which I highly doubt, as I said), would mean ANY airline can fly between ANY two airports on both sides of the Atlantic (as long as these airports are equipped for intl flights of course), as well as many other things that I won't go into detail about. This would make the LHR-JFK issues seem "small stuff", as the creation of dozens of new transatlantic combinations would fragment the market and open up many alternatives to LHR (and other US-EU hubs, for that matter). And for those who still choose LHR-JFK, yes, it would open up to competition, and there's nothing bad about that. But don't worry folks, it ain't gonna happen; I fear whatever agreement is reached will be a 'decaffeinated' one.
 
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Ncfc99
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 4:37 am

Quoting B777ER (Reply 5):
Survival of the fittess I say.

Haven't several American airlines been protected from going under over the last few years, UA and DL for example. Also there are several others that have been making losses over the last 10-15 years. Hardly survival of the fittest. More like survival due to goverment protection.Unfair competition against all other 'unprotected' airlines IMHO.
 
kaitak
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 4:42 am

Looking down the News section of this site, there is certainly a very big push by BA to kill this thing, although worryingly the UK Transport Secretary, Douglas Alexander seems to be agreeing with it, saying that "more work needs to be done". That may well be the case, but these other concessions - changes to the Fly America rule, cabotage, etc, what is their value compared to the ability to hold onto the position BA has at LHR. That is really the issue; these new concessions, while they may be attractive in some way, are as NOTHING compared to BA losing the position it has at LHR, so of course, it is going to do everything in its power to knock it back.

Interestingly, EU Commissioner Jacques Barrot suggested today that there might be some mechanism to change the voting system to a Qualifiied Majority System; under that, Britain would have 29 votes and would need 91 to block the deal; I can't think of any other country that is against it. Spain is for, Germany certainly is; France is believed to be (France will always vote yes if Britain votes no!), so really, it's going to be a hell of a job for Britain to kill the deal.

http://www.borsaitaliana.it/bitApp/n...arget=NewsViewer&id=267478&lang=en

I guess the other issue is, "what does Britain believe will come out of a "no" vote". Let's say that Britain actually vetoes the deal and (as now looks likely), it is the only one to do so? What will happen? Will it bring the concessions Britain says it wants? No; the most likely outcome is that the US would probably revoke B2 pretty quickly. This is not the first time we've been in a position where LHR access has been the spoiler and for Britain to kill a deal which is worth billions to the airline industry and to economies in the US and across Europe would not just annoy the US, it would cause serious problems for Britain's relationship with its other EU partners.

Basically, although there are certainly issues which may need to be improved upon, there is very little upside to vetoing this deal. The UK needs to look at the big picture, not just BA and LHR.
 
scotron11
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 5:49 am

Quoting Kaitak (Reply 26):

Basically, although there are certainly issues which may need to be improved upon, there is very little upside to vetoing this deal. The UK needs to look at the big picture, not just BA and LHR.

Agreed. 30 years the status quo has been the norm at LHR and it is time it was changed. As much as I admire BA, it is about time they put their money where their mouth is. If they cannot compete against airlines like CO, DL, US & NW, they might as well give it up!
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 6:08 am

Quoting Ncfc99 (Reply 25):
Haven't several American airlines been protected from going under over the last few years, UA and DL for example.

If you go back a few more years, it was BA that was tettering on the edge of extinction and protected by the UK government. But yes, all the various airlines have had issues from time to time.

That said, make no mistake -- while UA the airline continues to operate, all the former owners -- the people who paid money to acquire a percentage of the company through stock, etc -- got nothing. Those owners were completely and totally wiped out.

Quoting R2rho (Reply 24):
I don't understand how you're centering this debate all around LHR slot rights.

Because, quite honestly, what else of value is there in this Open Skies for the United States, which already has rights to fly to European countries? Flip the situation around -- allow open skies, allow acces to Heathrow, then have the US airports all impose slot restrictions that mean that no flights from European operators could be added. That would seem unfair, wouldn't it?

Steve
 
atmx2000
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 8:53 am

Quoting Scotron11 (Reply 27):
Agreed. 30 years the status quo has been the norm at LHR and it is time it was changed. As much as I admire BA, it is about time they put their money where their mouth is. If they cannot compete against airlines like CO, DL, US & NW, they might as well give it up!

Well BA obviously enjoys the current assymetrical competition, flying from their hub, the principle UK gateway, to those airlines' hubs at EWR, JFK, PHX, PHL, and DTW while those airlines are relegated to fly to LGW.

But thinking about things some more, I think they also fear that there will be increased flights at Gatwick from these airlines other hubs which aren't possible now given the restrictions on total routes to LGW and LHR. Some of hubs may not warrant LHR service but might be good for LGW service. For example NW could add MEM and DL could add Orlando.

Another thing they might not like is that US airlines could use LGW as a stopover for flights to India, picking up 5th freedom traffic from the UK on the way. Right now UK airlines have unfettered 6th freedom traffic rights between the US and India via London, Indian airlines have 5th freedom rights (but are limited by aircraft availability and UK-India bilateral) and US airlines have no 5th freedom rights (at least via London, not sure about outside London). Non-stop routes are viable from certain US cities due to demographics and available aircraft capabilities. 1 stop flights via the UK on the other hand might make additional routes viable.
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Glareskin
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 8:58 am

Let's review the since 1992 existing open-skies agreement between The Netherlands and the US. Who won?

IMO the customers since AMS is offering a very competitive mix of airlines to the US to multiple destinations. AMS wouldn't be as interesting without the agreement. Besides the impressive amount of flights offered by the KLM / NWA alliance and the flights from Asian carriers that make a stop in AMS the following flights are offered by USA based Airlines: US to Philadelphia, United to IAD and ORD, CO to EWR and IAH, DL to ATL, CVG and JFK. Correct me if I forgot any. I wonder why AA isn't offering anything....

Further both KL and NW won because they got antitrust protection for their alliance. Both airlines still say they are very happy with their code-share agreement. If my information is correct they serve the following destinations from AMS: Atlanta, Boston, Chicago, Detroit (hub NW), New York Newark, New York JFK, Houston, Los Angeles, Memphis (hub NW), Minneapolis (hub NW), Seattle, San Francisco, Washington, Hartford (from July).

Anyway, I personally am very satisfied with the choice in AMS, especially since the competition from LHR, FRA and CDG is so close, not to forget the neighbouring intl. airports of DUS and BRU. I hope the EU open-skies will not make some of the airlines move to another airport.
There's still a long way to go before all the alliances deserve a star...
 
scotron11
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 1:32 pm

Quoting Glareskin (Reply 30):

Let's review the since 1992 existing open-skies agreement between The Netherlands and the US. Who won?

IMO the customers since AMS is offering a very competitive mix of airlines to the US to multiple destinations.

I was thinking, if the US/EU deal does go through, will SQ revive their application for LHR-JFK they sought a couple of years ago? Not to mention CX?
 
Gemuser
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 2:23 pm

Quoting Sllevin (Reply 13):
This remains a matter of semantics. They can't be forced to give up slots, but they could easily be penalised in other ways. For example, the US Department of Justice would determine that Open Skies, until CO/DL/US/NW have enough Heathrow slots, makes the BA/AA alliance through oneworld and codesharing anti-competitive, and order them to cease cooperation -- or be fined -- until such time as CO/DL/US/NW have enough Heathrow slots to satisfy the DOJ.

But does BA have to give up the slots? No, of course not. They can simply cancel their codeshares and reciprocal arrangements with AA, for example.

But the real result would be that they would end up giving up slots.

Are you for real??? The UK would retaliate aganist US airlines.

Besides there is nothing in the Open Skys agreement about slots, AFAIK. So CO, DL, etc will have to buy them.

Gemuser
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sllevin
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 4:05 pm

Quoting Gemuser (Reply 32):
Are you for real??? The UK would retaliate aganist US airlines.

Again, see Microsoft and the 4 million euro PER DAY fines being assessed for their being anti-competitive in the EU. Do you see the US sanctioning EU companies? No.

In fact, that's a VERY strong parallel. Microsoft is being fined because the EU commission feels that the quality and COST of the documention (for others to interoperate with their software) they are providing is not satisfactory. Note that there is no published or defined standard for what WOULD be satisfactory.

So the US would have a very strong case to say that AA/BA cooperation (oneworld) is, in the same vein, anti-competitive and that the cost of other airlines (CO/NW/DL/US) having to buy slots is too high. Why should airlines have to pony up what will be over 1 billion dollars just to get a level playing field? How can that POSSIBLY be good for the consumer?

And let's face it, it's not like the UK airlines in total would really be hurt by the loss of the slots. What're we talking about...a dozen flights a day? To get Open Skies, that seems more than fair. The truth, of course, is that BA desperately doesn't want Open Skies at all.

Steve
 
Gemuser
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 4:55 pm

Quoting Sllevin (Reply 33):
And let's face it, it's not like the UK airlines in total would really be hurt by the loss of the slots. What're we talking about...a dozen flights a day? To get Open Skies, that seems more than fair. The truth, of course, is that BA desperately doesn't want Open Skies at all.

Once again, are you serious? There is NO parallel, there is no US-UK/EU treaty on monoplies, there is a UK/EU/US one on airservices. The US government probably thought it was a good thing to get Microsoft, I didn't hear any loud complaints from the US at the time. In fact there would most likely be retaliation from the whole EU as it would be seen as a violation of the new treaty, I assume.

As well this sort of action could trigger the UK's claw back legislation, (which would be outside the EU rules), which redirects penalities imposed on UK companies back on companies of the other country. I assume it is still in place.

In the real world neither sitution would actually happen, the UK & US would resolve something.

Gemuser
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kaitak
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 9:34 pm

AF/KLM have issued a press statement, which is strongly in favour of the new Open Skies deal. I guess that means "yes" (ja! oui!) votes from France and the Netherlands. Other states known to be firmly in favour are Ireland, Spain and Germany. The only state which has given any indication that it might vote against is the UK.

My question is, based on M. Barrot's comments on Monday, in which he referred to the possibility of the voting be done by qualified majority, how would this actually happen? As this is, strictly speaking, an issue which requires unanimity, I wonder if it will happen, initially, by a standard vote and if this gets through, without Britain vetoeing it, no problem. If Britain does exercise its veto, what then?

You will have one country out of 28 (including the US) against the deal and 27 in favour. Now, strictly speaking, everything would be thrown into reverse by a veto and the EU should be asking countries to revoke their bilaterals, all unpleasant stuff, yada, yada. So, in that case, it would make sense if these countries which want to press ahead can do so. Britain would probably not recognise the validity of this, but what can it actually do? If the other 26 EU states decide that they want to proceed, what options are open to the UK. Sure, they can stay out and they will not benefit. At all; not a whit. They can run the risk of the US revoking Bermuda 2. That's their problem; they can go into a corner and sulk.And everyone else can progress.

Would the US mind? Why would they care? 26 sovereign nations make a slight change to the way they vote and approve a deal the US wants. No problem there. And, now that the US DOT has clarified that Emissions Trading is not included in the treaty, US Congressional approval should be a formality.
 
Glareskin
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 10:34 pm

Quoting Scotron11 (Reply 31):
I was thinking, if the US/EU deal does go through, will SQ revive their application for LHR-JFK they sought a couple of years ago? Not to mention CX?

don't think Singapore or China Hong Kong are part of the US nor Europe. So formally this has nothing to do with it. Of course, by stiffer competition plus more slots from US based airlines it might be getting harder for them to get the rights.
 twocents 
There's still a long way to go before all the alliances deserve a star...
 
commavia
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 10:37 pm

Quoting R2rho (Reply 24):
A true US-EU open skies agreement, if done correctly (which I highly doubt, as I said), would mean ANY airline can fly between ANY two airports on both sides of the Atlantic

If I understand you correctly, that's pretty much what it looks like this deal will do. Now, I suppose it won't be any airline that could fly between the E.U. and U.S., as flag carriers of territories outside the E.U. and U.S. would still likely have to get fifth freedom rights, etc., but the deal would allow any U.S. airline to fly from anywhere in the U.S. to anywhere in the E.U., and any E.U. airline to fly from anywhere in Europe to anywhere in the U.S.

Quoting Kaitak (Reply 26):
Interestingly, EU Commissioner Jacques Barrot suggested today that there might be some mechanism to change the voting system to a Qualifiied Majority System; under that, Britain would have 29 votes and would need 91 to block the deal; I can't think of any other country that is against it. Spain is for, Germany certainly is; France is believed to be (France will always vote yes if Britain votes no!), so really, it's going to be a hell of a job for Britain to kill the deal.

This whole push for unanymity sounds just like the Articles of Confederation. (And, by the way, the E.U. overall reminds me of those early U.S. governing articles in many, many other ways.) Is it really realistic to have 27 nation states all agree on everything? That is just ridiculous, impractical, and virtually impossible, without watering things down so dramatically that there is really nothing left to disagree about. If the E.U. is a federal state, then fine, and it is just a customs union and regulatory conglomeration, then fine. But they need to pick one or the other because this hybrid model where the countries still have some independence, but can veto laws impacting other sovereign countries, is not sustainable. It wasn't in 1785, and it isn't now.

If the U.K. is hell bent on keeping U.S. carriers out of BA's turf, then fine, let the U.K. continue to sink further and further as a premier aviation gateway and let Heathrow continue to languish as it tries to compete with larger, more modern and more efficient AMS, CDG and FRA, and let the rest of the E.U. move on and sign a strong and impactful deal liberalizing its market with the U.S.
 
n1786b
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 07, 2007 10:50 pm

Quoting Kaitak (Reply 35):
My question is, based on M. Barrot's comments on Monday, in which he referred to the possibility of the voting be done by qualified majority, how would this actually happen? As this is, strictly speaking, an issue which requires unanimity, I wonder if it will happen, initially, by a standard vote and if this gets through, without Britain vetoeing it, no problem. If Britain does exercise its veto, what then?

It has to be a unanimous decision.

http://investing.reuters.co.uk/news/...T_0_BUSINESS-AIRLINES-EU-US-DC.XML

BRUSSELS (Reuters) - A draft U.S.-European Union agreement on liberalizing transatlantic air travel requires the unanimous backing of the 27 member states, according to the EU Council's legal service, an EU diplomat said on Wednesday.

The legal opinion gives Britain a potential veto over the pact clinched last Friday by EU and U.S. negotiators....
 
IADLHR
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 12:03 am

Quoting Gemuser (Reply 32):

Are you for real??? The UK would retaliate aganist US airlines.

Remember that the US flights are far more important to the survival of BA, VS and maybe, to a degree, the tourism to the UK than the US airlines flights to the UK.

The US carriers would still be able to fly to other cities in Europe while BA would be shut out of the US. So what does retliation to US carriers do, the UK would only harm themselves.

If the UK vetos Openskies, easily, easily within 30 days or less the BAS/AA condesahre will be revoked as will Bermuda 2. In addition the application for Virgin America will be denied. All of that happening tright at the start of the peak summer travel period. It is a situation, Im sure that BA, VS and the UK economy dont want to be in.

[Edited 2007-03-07 16:19:56]
 
bastew
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 12:22 am

Was flicking thru the Financial Times onboard today and there was an article on the front page quoting a uk government minister as saying the UK is not happy with the new proposed deal as there is not enough in it to benefit the EU.

Any veto by the UK on the deal sinks it.

BA shares rose 10.25p today.
 
masseybrown
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 1:50 am

Quoting N1786b (Reply 38):
It has to be a unanimous decision.

To put this in perspective, what other EU issues have been killed by one dissenter?
 
r2rho
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 1:53 am

Quoting Commavia (Reply 37):
If I understand you correctly, that's pretty much what it looks like this deal will do. Now, I suppose it won't be any airline that could fly between the E.U. and U.S., as flag carriers of territories outside the E.U. and U.S. would still likely have to get fifth freedom rights, etc., but the deal would allow any U.S. airline to fly from anywhere in the U.S. to anywhere in the E.U., and any E.U. airline to fly from anywhere in Europe to anywhere in the U.S.

Correct! In my post I meant any EU/US airline, of course! Good of you to clarify it though!
 
tayaramecanici
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 2:24 am

Quoting Atmx2000 (Reply 29):
Another thing they might not like is that US airlines could use LGW as a stopover for flights to India, picking up 5th freedom traffic from the UK on the way. Right now UK airlines have unfettered 6th freedom traffic rights between the US and India via London, Indian airlines have 5th freedom rights (but are limited by aircraft availability and UK-India bilateral) and US airlines have no 5th freedom rights (at least via London, not sure about outside London). Non-stop routes are viable from certain US cities due to demographics and available aircraft capabilities. 1 stop flights via the UK on the other hand might make additional routes viable.

IMO US and India based airlines will prefer cities like BHX and LTN over LGW due to the location of the pax catchment. CO has announced a direct EWR - BOM starting Oct'07. I won't be surprised if they start a EWR - BHX - AMD soon. The catchment of leicester is within 30min of BHX and has a huge gujarati speaking population with close ties to the same community in Newjersey. LTN is attractive to the indian diaspora living in North london suburbs of Wembley/Harrow streching upto the egde of london commuter belt in Milton Keynes/ Northampton.

These direct US-INDIA flights don't augur well for the EU airlines especially BA. In their last annual report BA was on record claiming flights to India generate the largest revenue after USA. With 9W this year and Kingfisher next year, planning their own direct flights to the USA these will dent BA's fortunes, as it has to compete with the likes of EK and EY for the one stop pax alongwith the EU majors.

Probably BAA had seen this coming and decided get rid of LHR.
''You are as good as your nearest competitor'' Bob Crandall.
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 3:19 am

Quoting Gemuser (Reply 34):
There is NO parallel, there is no US-UK/EU treaty on monoplies, there is a UK/EU/US one on airservices.

What are you talking about? What would possess you to think that an air services treaty overrides anti-trust and consumer rights? If that were the case NW and KL wouldn't have had to apply for anti-trust immunity since the Netherlands and the United States have an Open Skies treaty. AA and BA would not have been denied full cooperation over the Atlantic. etc etc etc

You are wrong. The United States can declare the AA/BA cooperation an anti-trust violation with Open Skies and quite likely will unless and until slots are provided to the other US airlines.

Steve
 
IADLHR
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 3:31 am

Quoting Sllevin (Reply 44):
You are wrong. The United States can declare the AA/BA cooperation an anti-trust violation with Open Skies and quite likely will unless and until slots are provided to the other US airlines.

Quite honestly, until a few days ago, when this came up, I completly forgot about the BA/AA codesahre being a tool the US could use to get slots at LHR. Totally forgot about it. If the UK does not approve the openskies the USA will force the codeshare to be discontinued. On the other hand, If the UK does approve it and there is trouble getting slots for the new entrants at LHR, the USA will take action on the codeshare.
 
atmx2000
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 3:49 am

Quoting Tayaramecanici (Reply 43):
IMO US and India based airlines will prefer cities like BHX and LTN over LGW due to the location of the pax catchment. CO has announced a direct EWR - BOM starting Oct'07. I won't be surprised if they start a EWR - BHX - AMD soon. The catchment of leicester is within 30min of BHX and has a huge gujarati speaking population with close ties to the same community in Newjersey. LTN is attractive to the indian diaspora living in North london suburbs of Wembley/Harrow streching upto the egde of london commuter belt in Milton Keynes/ Northampton.

Perhaps, but as I said I don't know what the 5th freedom rights are outside of London currently. People have said that the UK was already willing to grant 5th freedom flights to US carriers serving areas outside of London, but I don't know if that wwas just to London.

Quoting IADLHR (Reply 45):
Quite honestly, until a few days ago, when this came up, I completly forgot about the BA/AA codesahre being a tool the US could use to get slots at LHR. Totally forgot about it. If the UK does not approve the openskies the USA will force the codeshare to be discontinued. On the other hand, If the UK does approve it and there is trouble getting slots for the new entrants at LHR, the USA will take action on the codeshare.

The current codeshare is not on transatlantic flights. I don't think there is a case for stopping non transatlantic codeshares.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 5:03 am

Quoting Atmx2000 (Reply 46):
I don't think there is a case for stopping non transatlantic codeshares.

The question isn't over the codesharing, but the total cooperation and coordination. All those oneworld benefits, etc that are accrued would be the core of the issue -- and not just the AA ones ex-LHR but the BA "use" of AA's network within the United States.

Steve
 
kaitak
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 5:57 am

Let's fast forward a few weeks and assume that the UK does wreck the whole thing. Now, strictly speaking, the EU should say, right, all systems stop. Everyone has to revoke their bilaterals and we get into this silly, time consuming and utterly wasteful exercise, just because BA grabbed the British minister by the b****s and attached an electrode.

Q: Is the EU Commission really going to grant SO much power to one airline that it will effectively let them get away with murder. Remember, all this stuff about cabotage and foreign ownership of US carriers is really just a smokescreen, asking for something BA knows will sink the whole thing. No one will be happier if this thing sinks without trace for years to come. For Britain to veto this would be a HUGE victory for BA.

So, instead of following the BA script, which would allow BA not just to hold its position at LHR, but also to mess things up for all of its EU competitors, why not (for once) take a sensible approach and allow the other 26 countries who want a deal ON THE BASIS THAT THE COMMISSION RECOMMENDED to go forward in that way. Now, I know that unanimity is required for the vote at Council level, but if these 26 countries were to do a deal with the US on the basis of the deal agreed, with a community aviation clause (excluding the UK), the Commission could turn a blind eye to it and everyone could win.

Legal? In this situation, it's a case of "legal schmegal"; an obstacle has been wilfully placed by one airline and its glove puppet and this is supposed to hold the rest of Europe back indefinitely. "Dream on"; this is something that needs to happen. Let's not let BA or the UK govt stand in the way.
 
atmx2000
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 6:07 am

Quoting Sllevin (Reply 47):
The question isn't over the codesharing, but the total cooperation and coordination. All those oneworld benefits, etc that are accrued would be the core of the issue -- and not just the AA ones ex-LHR but the BA "use" of AA's network within the United States.

The refusal for ATI was always related to marketshare over the Atlantic, particularly between the US and UK of both
BA and AA, and that. It had little to do with domestic US operations or BA flights from LHR to elsewhere in the UK and Europe, which is why BA and AA can codeshare.
ConcordeBoy is a twin supremacist!! He supports quadicide!!

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