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bastew
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 08, 2007 5:27 pm

Many things are unfair in the aviation world.

Yes, it is unfair that BA (AND Virgin/AA/UA) have 'exclusive' transatlantic rights to Heathrow.

It is also unfair that some US carriers seem to be able to be on the brink of extinction through pure mis-management or the simple mechanism of competition before rising like a phoenix (thanks to Chapter 11 protection from creditors, the ability to have labour agreements quashed in the courts etc) with new colours, branding and uniforms and taking on the world.

It is ridiculous that the EU turns a blind eye or makes pathetic allowances to EU carriers like Alitalia, whom would have been dead in the water years ago if the de-regulated EU market was really able to operate in a de-regulated way.

It is crazy, that when a BA aircraft lands at Lagos, Abuja or Nairobi, they pay more in landing and handling fees than they do in airports such as HKG/LAX/NRT et al.

EU/US open skies are just the tip of the iceberg.
 
BHXFAOTIPYYC
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 12:21 am

Quoting Kaitak (Reply 48):
Let's not let BA or the UK govt stand in the way.

Strong words indeed.

BA makes about 70% of it's profit from the transatlantic route as does VS. What do you think is more valuable, BA being able to operate CDG NYC or AF being able to operate LHR NYC?

As for the EU, I only think that the nett contributors should get a vote, which would be about 5 out of the 27. Any nation that has received more than it has put in doesn't get a say. It is idiotic that half the crappy countries in the EU get to vote on such matters.
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Tristarsteve
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 2:37 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.

But the BA/ AA cooperation in One World Specifically excludes transatlantic services.

I personally don't think BA is scared of competition from the American carriers. What they are worried about is if BMI sells out to Lufthansa/Star Alliance and starts services from LHR over the Atlantic.
I think BA made a serious mistake not buying the BMed LHR slots.
 
kaitak
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 3:58 am

Lufthansa is now in favour of Open Skies.

http://www.msnbc.msn.com/id/17517173/

Still, the UK seems to be the only one. I wouldn't like to be in Mr. Alexander's position. He is certainly going to be leaned upon heavily by both sides over the next two weeks. The approach needs to be carrot and stick, in the sense that the US will need to promise him that it will enter into meaningful talks asap after the vote ... BUT if the UK vetoes it, the US will respond with an immediate revocation of Bermuda 2, to be effective from midnight on the 23rd. I call it "incentivised co-operation".

Quoting BHXFAOTIPYYC (Reply 51):
As for the EU, I only think that the nett contributors should get a vote, which would be about 5 out of the 27. Any nation that has received more than it has put in doesn't get a say. It is idiotic that half the crappy countries in the EU get to vote on such matters.

Yeah, that'll happen. And is Portugal a net contributor? (I don't think so). How exactly do you define a crappy country? One which, through no fault of its own - largely geographical issues - it found itself a satellite state of the USSR for 40 years?
 
commavia
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 4:08 am

Quoting Kaitak (Reply 53):
Still, the UK seems to be the only one.

The question now becomes -- how much pressure will London and Number 10 be able to handle before the buckle under the pressure of what is now beginning to look like a unanimous (sans Britain, of course) European approval of this deal. Thus far, I haven't heard a single other EU government truly criticize the deal or hint at a no-vote when it comes up before the EU. So, the UK will now be left out on an island (literally and figuratively  Smile) and be forced to make a choice -- is protecting the interests of BA worth killing a deal that every single other EU member is in favor of?

Quite an interesting dynamic.
 
ikramerica
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 4:25 am

Quoting Commavia (Reply 54):
The question now becomes -- how much pressure will London and Number 10 be able to handle before the buckle under the pressure of what is now beginning to look like a unanimous (sans Britain, of course) European approval of this deal.

Well, London doesn't have much of a leg to stand on in objection.

If anything, Bermuda and Bermuda II were transitional treaties that have already held on too long. They allowed the UK to protect their national aviation interest during times of trouble. It also helped create VS out of nothing.

But those times have passed. It's sort of like an affirmative action program for Airlines. And since it's run it's course, it should be ended. But just like any 'entitlement' program, try to tell the entitled they are no longer entitled and see how they respond?  Wink

What's interesting is that it isn't even in ALL of UK aviation's best interest to fight this. British Midland, smaller upstarts and airlines that don't even exist all would like LHR-USA access but can't have it.

Washington isn't going to cave to pressure from AA and UA even though they are the two largest carriers in the USA, so Downing Street would be awfully weak if they blocked all of this under pressure from Walsh.

PS - Has SRB chimed in about it at all?
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par13del
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 5:22 am

A vast majority of EU airlines have slots at LHR, another poster stated this, I'm asking the question. Would any EU airline that has slots at LHR be able to use them to fly anywhere in the US? If true, then a few things become pretty clear to me.

1. BA and the UK Govt. could care less about US carriers landing at LHR, they are worried about other EU airlines cutting into their trans-atlantic market

2. Why would other EU countries complain about this deal if their carriers can now enter the profitable LHR-USA market?

3. As already mentioned, BA can fly into the hubs of all major US airlines from LHR, while the vast majority of US airlines cannot fly into LHR, why would BA want to change that, how is taking one for their EU brothers and sisters going to help them when they are lining up to take Airbus / EADS jobs away from the UK? Even if private, BA is a UK carrier, do they not also consider national interest of the UK along with the almightly dollar or pound or euro?
 
ikramerica
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 6:03 am

Quoting Par13del (Reply 56):
1. BA and the UK Govt. could care less about US carriers landing at LHR, they are worried about other EU airlines cutting into their trans-atlantic market

Doesn't this apply to FRA, CDG, etc. as well? BA and VS can fly FRA-JFK or CDG-MIA under the new rules. It cuts both ways.

And frankly, your claim is 180 degrees from reality. The whole B2 thing is precisely because the UK DOES care about USA based airlines landing at LHR. If they didn't care, they could have rescinded B2 long ago before the EU open skies thing was on the table. But B2 specifically prohibits USA based airlines from landing at LHR, in whole or in part, but doesn't prevent non-USA airlines from flying LHR-USA with 5th freedom rights.
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ClassicLover
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 6:17 am

Good article in The Australian about this -

http://www.theaustralian.news.com.au...ory/0,20867,21348521-23349,00.html

Basically says EI will be the big winner.
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atmx2000
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 9:46 am

Quoting Kaitak (Reply 53):
Still, the UK seems to be the only one. I wouldn't like to be in Mr. Alexander's position. He is certainly going to be leaned upon heavily by both sides over the next two weeks. The approach needs to be carrot and stick, in the sense that the US will need to promise him that it will enter into meaningful talks asap after the vote ... BUT if the UK vetoes it, the US will respond with an immediate revocation of Bermuda 2, to be effective from midnight on the 23rd. I call it "incentivised co-operation".

I think they could only announce the intention to renounce, not immediately revocation.

Quoting Par13del (Reply 56):
1. BA and the UK Govt. could care less about US carriers landing at LHR, they are worried about other EU airlines cutting into their trans-atlantic market



Quoting Ikramerica (Reply 57):
The whole B2 thing is precisely because the UK DOES care about USA based airlines landing at LHR. If they didn't care, they could have rescinded B2 long ago before the EU open skies thing was on the table. But B2 specifically prohibits USA based airlines from landing at LHR, in whole or in part, but doesn't prevent non-USA airlines from flying LHR-USA with 5th freedom rights.

Certainly they care about US airlines, but they likely care about what the EU airlines are going to try.
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sllevin
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RE: EU/US OpenSkies: Who Wins?

Fri Mar 09, 2007 10:07 am

Quoting Atmx2000 (Reply 49):
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.

No, that's very true. However, with Open Skies, the 'seamless' AA/BA relation ex-LHR and within the US is going to come into play. In other words, part of BA's strength is that they can cleanly put passengers onto AA's network withing the United States. While that's fine under the current situation, it's not likely to be "fine" under Open Skies.

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

Fri Mar 09, 2007 10:21 am

Quoting Sllevin (Reply 60):
No, that's very true. However, with Open Skies, the 'seamless' AA/BA relation ex-LHR and within the US is going to come into play. In other words, part of BA's strength is that they can cleanly put passengers onto AA's network withing the United States. While that's fine under the current situation, it's not likely to be "fine" under Open Skies.

I don't see why open skies will make the current relationship problematic. BA won't have any new rights domestically in the US, so their won't be any antitrust issues in the US. The only question might be 5th freedom rights from LHR and from the US, where the airlines might be able to coordinate. But I don't think competition due to 5th freedom traffic out of LHR to beyond being the US governments concern and BA doesn't have existing marketshare on 5th freedom routes out of the US, so how can consumers be harmed.

The only antitrust issue is air traffic between the US and UK, where coordination between AA and BA could impact consumers by reducing competition given the two airlines already significant marketshare on US-UK routes, particularly US-London routes.
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IADLHR
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 12:13 am

I am at a loss here. Just suppose the openskies is approved by the EU and US. When it comes time for LHR to be opened the UK says that they were against it or some such thing. In other words more stalling tactics etc. etc. What recourse, under that scenario would the EU have with the UK?

Years ago, cant remember when, I think it was when US first got approval to start CLT-LGW service. For months and months and still longer US was given the run around about slots at LGW that precluded them from starting the service. Several months and failed attempts later, there was a meeting between the Uk Transport Minister, at the time and the US DOT. Guess what? The slots becaame instantly available and voila, US started CLT-LGW.

What is to prevent some stalling tacitc from the UK if the openskies is approved and signed and later, the UK tries to back away from it. Im sure that, at that point, George Bush would have something to say and possibly do about it. Still, is all this a disticnt possibility?

On a somewhat different note, the US has shown their willingness to try and work on increasing the role of foregin ownership in US airlines. Even though THE FIRST ATTEMPT failed, we still continue to SHOW willingness to talk about it and try and come up with a solution. Meanwhile the UK has showwen no willingness about doing anything, at all, to open LHR ot all US carriers. It is my belief that when the UK shows some serious willingness about LHR, that quite likely the US will respond more to raising the foreign owenrship levels.
 
commavia
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 12:17 am

Quoting IADLHR (Reply 62):
It is my belief that when the UK shows some serious willingness about LHR, that quite likely the US will respond more to raising the foreign owenrship levels.

That would be equitable, but unlikely. The U.S. won't be budging one inch on domestic airline ownership any time soon. It is just far too politicized. The Democrats who won control of both houses of Congress last year did so in many cases on populist and protectionist campaign messages focused on slowing the impact of globalization on U.S. workers. I highly doubt a Democratic congress will ever allow U.S. carriers to be majority owned by foreigners. Not going to happen.
 
r2rho
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 3:28 am

Here's what The Economist says about it:

http://www.economist.com/displayStory.cfm?story_id=8819753&fsrc=RSS

"Europeans have moved the most" -> I agree!
 
masseybrown
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 3:53 am

This Economist article and others have noted that US airlines currently hold rights to operate between some EU points. The authors rarely if ever note that the rights are seldom (presently not at all?) exercised and are not likely to be. I'm surprised the US didn't yield these largely worthless rights in negotiation.
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 7:32 am

Quoting Atmx2000 (Reply 61):
I don't see why open skies will make the current relationship problematic.

Because Open Skies will, at inception, add even more advantage to BA and AA because those airlines already hold slots and can move operations to Heathrow and BA, by virtue of having a vast number of slots, can add direct heathrow service to cities like IAH that don't currently offer it.

Thus, one day 1, BA's position is significantly improved. Certainly CO is going to take a hit out of IAH when on Day 1 BA offers a non-stop to LHR and CO still only offers flights to LGW.

AA will improve in the midwest especially within the "near Texas" region over CO because while they will still require a connection for folks not in DFW, they'll have Heathrow service. People will, for example, favor MSY-DFW-LHR over MSY-IAH-LGW.

So what the US has to do -- in fact, is obligated to do in the name of consumers -- is to reduce BA's "strength" in other areas. Cooperation with AA would be one way of doing so. Imposing fines (which would fundamentally be passed down as higher costs) would be another way of reducing BA's strength in the market.

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

Sat Mar 10, 2007 8:33 am

Quoting Sllevin (Reply 66):
Because Open Skies will, at inception, add even more advantage to BA and AA because those airlines already hold slots and can move operations to Heathrow and BA, by virtue of having a vast number of slots, can add direct heathrow service to cities like IAH that don't currently offer it.

Thus, one day 1, BA's position is significantly improved. Certainly CO is going to take a hit out of IAH when on Day 1 BA offers a non-stop to LHR and CO still only offers flights to LGW.

AA will improve in the midwest especially within the "near Texas" region over CO because while they will still require a connection for folks not in DFW, they'll have Heathrow service. People will, for example, favor MSY-DFW-LHR over MSY-IAH-LGW.

This has nothing to do with the BA-AA codeshare. It would happen even if BA and AA were not alliance partners. In fact, BA flying to IAH would divert traffic from AA's hub.
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kaitak
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 8:41 am

Our PM (or "Taoiseach" - or Tea-shoch, in Irish) is travelling to Washington for St. Patrick's Day to discuss with matter with Pres. Bush. He has already discussed it with Tony Blair, with whom he also has a good relationship and TB seems keen on getting a deal.

The Irish govt has been at the forefront of lobbying for this deal and as you'll see, EI wants to add three new US routes this Autumn, so it's important we get this sorted out. Obviously, our hope is that the UK will fall in line on the 22nd/23rd, but if not, Plan B is a bilateral with the US; hopefully it won't come to that.

http://www.rte.ie/business/2007/0309/openskies.html?rss

(The report is a tiny bit confused, saying that we have no bilateral with the US; we do, of course, but it's a pretty backward, restrictive one.)
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 9:08 am

Quoting Atmx2000 (Reply 67):
This has nothing to do with the BA-AA codeshare. It would happen even if BA and AA were not alliance partners. In fact, BA flying to IAH would divert traffic from AA's hub.

Again, please understand that the codesharing is but a single example of what might be done -- not the only example or path to solving the problem.

The point is, BA will not be allowed to expand its Heathrow operations to the United States (nor will AA) until such time that "equal footing" is established. How that is accomplished is variable. BA has stated that they believe the conditions for such equal footing will be providing slots to US carriers without them. I personally believe they are correct in that assesment. Until CO/DL/US/NW have Heathrow slots, BA is not going to be allowed additional competitive advantage. The purpose of Open Skies is not to be a windfall for extant operators out of Heathrow, nor a penalty for those operators in the US who currently have no Heathrow access.

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

Sat Mar 10, 2007 10:15 am

Quoting Sllevin (Reply 69):
The point is, BA will not be allowed to expand its Heathrow operations to the United States (nor will AA) until such time that "equal footing" is established.

That's a little tricky. Even combining all US carriers, they are obviously going to have less flights to LON than BA flights to the US. It's just how it works. BA and VS have several times more flights to US than AA, DL, NW, CO, UA and US combined. Just because US carriers are flying to LON (and other destinations in Europe) from their hubs while BA, VS (and if you want to, BD) have their hubs in LON allowing them to fly to any int'l US airport.

I mean... It's like banning all NW-KLM grownth in AMS until AA enters and gets to a decent operation. It would go against the meaning of OPEN skies. I really wouldn't see the logic in waiving the BA-AA-UA-VS (and NZ....) "privileges" and get to protect and benefit NW, CO or the likes, even if it's "temporal". There are plenty of other carriers at LHR. Make them freeze too until new neighbours feel comfortable and you'll get a mess.
 
atmx2000
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 10:41 am

Quoting Sllevin (Reply 69):
The point is, BA will not be allowed to expand its Heathrow operations to the United States (nor will AA) until such time that "equal footing" is established.

OK, that is certainly a possibility, but it has nothing to do with the codeshare. AA won't be held hostange in any case, because they don't have additional slots that could be shifted to US service. All their LHR slots are in US service. BA on the other hand has plenty of slots that it could shift to US service.

Quoting Aisak (Reply 70):
That's a little tricky. Even combining all US carriers, they are obviously going to have less flights to LON than BA flights to the US. It's just how it works. BA and VS have several times more flights to US than AA, DL, NW, CO, UA and US combined. Just because US carriers are flying to LON (and other destinations in Europe) from their hubs while BA, VS (and if you want to, BD) have their hubs in LON allowing them to fly to any int'l US airport.

No, that isn't true. Bermuda II grants US and UK airlines equal frequencies to LHR/LGW, so BA and VS certainly don't have several times more flights to the US. And BA and VS don't have the right to fly to any international airport in the US from LGW/LHR.
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Aisak
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 11:20 am

Yes sorry, i've mixed up thing a little bit.

Quoting Atmx2000 (Reply 71):
Bermuda II grants US and UK airlines equal frequencies to LHR/LGW, so BA and VS certainly don't have several times more flights to the US.

I didn't know that, and certaninly, i didn't get that impresion. Bearing in mind that downloadable online timetables might not be the most accurate source to look up, i've got these flights for today sat 10th march.

aa
dfw 2x ord 4x lax 1x jfk 5x mia 2x rdu 1x bos 1x

us
phl 1x clt 1x

ua
iad 3x lax 1x sfo 2x ord 3x

nw
dtw 1x msp 1x

dl
atl 2x jfk 1x

co
iah 2x ewr 3x

which adds up 37 (i might have forgotten some, i don't know)

ba
dfw 1x ord 3x lax 2x sfo 2x ewr 3x jfk 7x mia 2x bos 3x iad 2x phl 2x mco 1x den 1x iah 1x dtw 1x sea 2x atl 1x

total ba: 34 (again, i'm not sure these are all)

And i didn't count vs which has more than 3 flights for sure. Maybe there's "another thing" beyond BII to explain these frequencies.

Quoting Atmx2000 (Reply 71):
And BA and VS don't have the right to fly to any international airport in the US from LGW/LHR.

Yes, i meant in the future BA/VS will have access to any int'l us airport under open skies while us carriers seem only worried about 1 in UK.
What i meant is UK carries may serve serveral airports in the US as the fly from their hub, LON as origin. But on the other hand, regarding LON, it's a destination to be flown from one of their hubs (i suppose they keep the hub structure, of course)
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Sat Mar 10, 2007 3:39 pm

Quoting Atmx2000 (Reply 71):
OK, that is certainly a possibility, but it has nothing to do with the codeshare. AA won't be held hostange in any case, because they don't have additional slots that could be shifted to US service.

The codeshares on both sides of the Atlantic are a source of strength for AA and BA. That's why they would be a potential point of leverage. Again, the goal is to not allow Open Skies to change the balance. Denying the codeshares within the US would have some impact on BA's operations.

I suspect no one wants to go down that road. The real resolution is going to be slots, and then everyone will be happy.

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

Sun Mar 11, 2007 8:33 am

Whats all the fuss about.

The end of B2 means BA can open up new routes to the US from LHR which it cannot do currenty.. DFW, Atlanta and Las Vegas are obvious ones.

As for the open skies, in reality it will be the BA LHR-NYC which will go into decline, and DL/CO and most like AF / BD that will open up a LHR-NYC route.

I doubt LH will open a LHR-US route, why would they, it would mean using a Long Haul Aircraft on a short route (say FRA-LHR-NYC), which wastes part of the FRA-LHR capacity and increases the over all cost. As LH own a large share of BD most likely it will be BD thats the winner here (and about time too).

Same for Air France, considering CDG-LHR is about to get whacked by Eurostar, upscaling an A321 to a A340 is hardly likely, as is the expense of maintaining a LHR base for a single A340.

I would imagine a more likely scenario would be one of the EU's smaller airlines having a go.. say Lot going KRK-LHR-NYC, as they do the KRK-NYC currently with a 767 a few times a week, and dont have a KRK -LHR route, and gain the bonus of LHR-NYC as well.

Maybe Malev, or even Olympic or any other airline with a small number of LHR routes currently.

I wouldnt be surprise if BA opened a LHR-DUB-NYC, LHR-MAD-MIA, Berlin-NYC (rotating the a/c from LHR on a regular cycle).
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mutu
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 12:55 am

Over time there will of course be winners and losers but not as a result of open skies. Businesses adapt to change, they have too. Consumers will certainly benefit in the short/medium term IF prices fall. But given that the best value options are currently EOS/Maxjet/Silverjet, from London to New York business class for the equivalent of a flexible economy fare ex LHR, I imagine that some carriers enthusiasim for LHR routes may diminish over time when they see how tough a market it is. just becasue BA makes a mint flying across the atlantic doesnt mean it will be easy.

That said, my main concern is that in the longer term we the consumer could in fact be the losers in all this. Too much competition kills businesses, lower profits means lower spends on hard product etc. Chapter 11 does concern me as well. An EU airline doesnt have this luxury so if it goes into battle on price and fails, its techniclly gone.

We could end up ironically with less choice, worse product and worse service in about 10 years time!!!!

fingers crossed it doesnt come to that
 
sllevin
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 2:48 am

Quoting StarGoldLHR (Reply 74):
t would mean using a Long Haul Aircraft on a short route (say FRA-LHR-NYC),

No it doesn't. You just rotate aircraft on the US end.

In other words, a given aircraft flies:

FRA-JFK-LHR-JFK-FRA

No need to fly FRA-LHR.

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

Mon Mar 12, 2007 3:02 am

Quoting MasseyBrown (Reply 65):
This Economist article and others have noted that US airlines currently hold rights to operate between some EU points.

Those rights are basically like the USA military bases in Germany. Vestages of another time, not of too much practical use to anyone today, but it is what it is.

But again, people, in the EU especially, seem to be confused about what the EU is. They are slowly redefining themselves as one nation, but they are NOT one nation. They are not, as defined, the same as the USA.

Any right to fly between the UK and Germany, for example, is a 5th freedom right, no different than NZ flying LAX-LHR. It isn't Cabotage, and it's frustrating when people try to equate the two. The only right that is even close to this was the Berlin run, which when granted was a vital life line to Berlin. And since the wall fell, no USA airline has any interest in flying it.
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masseybrown
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 4:50 am

Quoting Ikramerica (Reply 77):
But again, people, in the EU especially, seem to be confused about what the EU is. They are slowly redefining themselves as one nation, but they are NOT one nation.

It took the US until the Jackson Administration to get most of the federal vs state commercial issues sorted out, although they still crop up even today. I hope the EU gets there quicker; still, it's fun to watch them go through the same arguments we did.

Quoting Ikramerica (Reply 77):
Any right to fly between the UK and Germany, for example, is a 5th freedom right,

True, but I think the EU would like to call all flying between any EU points (irrespective of national borders) cabotage. I can't find a reason to object to that view. Maybe I could if giving up the available 5th freedom rights within the EU by US airlines had any economic cost, but these days it doesn't.
 
r2rho
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 5:54 am

Quoting Mutu (Reply 75):
Chapter 11 does concern me as well. An EU airline doesnt have this luxury so if it goes into battle on price and fails, its techniclly gone.

Agreed. Maintaining Chapter 11 rights for US airlines would turn an Open Skies agreement into a trap for EU airlines.

Quoting Ikramerica (Reply 77):
Any right to fly between the UK and Germany, for example, is a 5th freedom right, no different than NZ flying LAX-LHR.

Partially disagree. The EU is a single market, companies can fly around and set up operating bases wherever they want (as Easyjet and Ryanair do), an intra-Schengen flight is not considered an international flight. It is true, however, that many bureaucratic vestiges of the past remain in terms of old treaties, air traffic control incompatibilities etc etc that hinder the EU from operating as a true single market it terms of air transport, which effectively makes it, under current treaties, a 5th freedom right and a clear legal contradiction to the Treaty of the EU.

[Edited 2007-03-11 22:59:12]
 
atmx2000
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 6:35 am

Quoting Aisak (Reply 72):

I didn't know that, and certaninly, i didn't get that impresion. Bearing in mind that downloadable online timetables might not be the most accurate source to look up, i've got these flights for today sat 10th march.

I might be mistaken. I was looking at US DOT data and couldn't make the numbers balance either, though the number of flights were within around 25-30% of each other.

Quoting Aisak (Reply 72):
Yes, i meant in the future BA/VS will have access to any int'l us airport under open skies while us carriers seem only worried about 1 in UK.
What i meant is UK carries may serve serveral airports in the US as the fly from their hub, LON as origin. But on the other hand, regarding LON, it's a destination to be flown from one of their hubs (i suppose they keep the hub structure, of course)

But the US carriers would be able to fly from their hub to the primary UK gateway. Right now they face assymetrical competition that hurts them where they should be strong, as they don't gain access to premium passengers that fly from LHR as well as the greater international passenger traffic at LHR. They would also no longer face assymetric competition in that UK can connect passengers on long haul routes from the US to beyond via 6th freedom rights while US carriers don't have 5th freedom rights. Now I know the EU countries are making a big deal of 5th freedom flights to other European countries, but the reality is this won't happen because it would be an inefficient use of long haul equipment given the short distances in Europe, and would create scheduling complications. What is more important is to have 5th freedom rights to beyond destinations, though even this isn't perfect as it isn't going to be as efficent as a 6th freedom hub operation if the aircraft have to originate in the home country.

Quoting Mutu (Reply 75):
That said, my main concern is that in the longer term we the consumer could in fact be the losers in all this. Too much competition kills businesses, lower profits means lower spends on hard product etc. Chapter 11 does concern me as well. An EU airline doesnt have this luxury so if it goes into battle on price and fails, its techniclly gone.

Many EU airlines have received government funded bail outs, including AF during the 90s. That is likely to continue, like with Alitalia and Olympic. There have been quite a few more liquidations of large and medium sized US airlines than large EU airlines.

Quoting MasseyBrown (Reply 78):
True, but I think the EU would like to call all flying between any EU points (irrespective of national borders) cabotage. I can't find a reason to object to that view. Maybe I could if giving up the available 5th freedom rights within the EU by US airlines had any economic cost, but these days it doesn't.

I don't really see a reason to object to it, but they should give up something for it, like individual membership in international aviation bodies.
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JoFMO
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 8:37 am

Quoting Atmx2000 (Reply 80):
I don't really see a reason to object to it, but they should give up something for it, like individual membership in international aviation bodies.

I agree, that should be the long term result.

Problem is, that it only can be done when everyone else accept the EU as the legal body for representing all our airlines. It does not help when only the Us and few others see it this way. China, Nigeria and Cuba also have have to accept the EU as the legal body for all EU (plus Switzerland, Norway etc) countries when it comes to aviation treaties. And that is still a long way to go.
But the EU member states needs to be represented somehow. And as long as not everybody accepts that this has to be a EU body, the individual nations can't give up their individual representation.
 
atmx2000
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 1:05 pm

Quoting JoFMO (Reply 81):
Problem is, that it only can be done when everyone else accept the EU as the legal body for representing all our airlines. It does not help when only the Us and few others see it this way. China, Nigeria and Cuba also have have to accept the EU as the legal body for all EU (plus Switzerland, Norway etc) countries when it comes to aviation treaties. And that is still a long way to go.
But the EU member states needs to be represented somehow. And as long as not everybody accepts that this has to be a EU body, the individual nations can't give up their individual representation.

It doesn't help that many EU countries negotiate bilaterals with countries other than the US on an individual basis. Probably another reason why the US shouldn't give up 5th freedom rights in Europe.
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sllevin
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 1:13 pm

Quoting Ikramerica (Reply 77):
Any right to fly between the UK and Germany, for example, is a 5th freedom right, no different than NZ flying LAX-LHR. It isn't Cabotage,

I totally agree with your cited example, but aren't airlines such as Ryanair allowed to also fly domestically within the EU?

I thought that, for example, FCO-MXP would now be allowed. Is that not the case?

Steve
 
scotron11
Topic Author
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RE: EU/US OpenSkies: Who Wins?

Mon Mar 12, 2007 2:53 pm

Quoting Sllevin (Reply 83):

I thought that, for example, FCO-MXP would now be allowed. Is that not the case?

Ryanair does fly between Rome Ciampino and Milan Bergamo (CIA-BGY) and also Cagliari and Pisa (CAG-PSA).

Basically any EU airline can operate in any EU country, if they want to. Pretty cool, huh??
 
kaitak
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 13, 2007 1:47 pm

BA and Virgin and joining forces to fight the deal and are expected to appear before the "Commons Select Cttee", a body of backbench UK MPs, to discuss their position. The Transport secretary will also appear, as will bmi. Bmi, of course, is in favour and has threatened legal action if the UK vetoes the deal.

The UK is expected to be the key in getting this deal through; if it fails, then the whole EU/US Open Skies plan falls with it, so there is intense pressure on the UK to approve it.

While there may be concerns that the Open Skies deal is slanted in the US's favour, the concessions being discussed are pretty academic, in that they are unlikely to be used by EU carriers, even if they were granted.

http://www.ananova.com/news/story/sm_2238987.html?menu=
 
scotron11
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RE: EU/US OpenSkies: Who Wins?

Tue Mar 13, 2007 7:50 pm

Quoting Kaitak (Reply 85):

While there may be concerns that the Open Skies deal is slanted in the US's favour, the concessions being discussed are pretty academic, in that they are unlikely to be used by EU carriers, even if they were granted.

Apparently, Jacques Barrot says this interim agreement is the 1st stage and that negotiations on the 2nd stage, unlocking the US market, will begin in January 2008. If there is no agreement on the 2nd stage by 2010, then the EU can back out of the whole deal.(Reuters)

Although by that time, I would think it would be too little, too late!
 
atmx2000
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 14, 2007 5:47 am

Quoting Scotron11 (Reply 86):
If there is no agreement on the 2nd stage by 2010, then the EU can back out of the whole deal.(Reuters)

Although by that time, I would think it would be too little, too late!

What will they back out of and into? The EU-US open skies agreement to the current individual bilaterals? Or would they try and block 5th freedom rights within Europe or beyond Europe? If they tried to block beyond Europe, the US might just retaliate by block 6th freedom traffic.
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kaitak
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 14, 2007 1:20 pm

Quoting Atmx2000 (Reply 87):
What will they back out of and into? The EU-US open skies agreement to the current individual bilaterals?

I think that if they backed out, it would be a case of no bilaterals at all, since the EU Open Skies deal will replace all of these. The prospect of this would not be acceptable, particularly as it seems to be just one country asking for these - and every other EU country would suffer as a result of dropping O/S. I just can't see it happening. The idea of the EU forcing all EU countries to drop their US routes altogether, simply because the UK wants concessions? Not going to happen.

However, good news this morning. The UK now looks likely to back the deal, in which case, we're rolling!

http://politics.guardian.co.uk/economics/story/0,,2033169,00.html
 
scotron11
Topic Author
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 14, 2007 1:22 pm

Quoting Atmx2000 (Reply 87):

What will they back out of and into?

That's just it. I don't see how they could go back to what was before, or why they would even want to.
 
JoFMO
Posts: 1840
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 14, 2007 7:28 pm

Quoting Scotron11 (Reply 89):
However, good news this morning. The UK now looks likely to back the deal, in which case, we're rolling!

http://politics.guardian.co.uk/econo....html

I especially like the following:


"BMI - one of the airlines pressing for change, which would challenge the grip of British Airways and Virgin Atlantic on the valuable Heathrow to London route - conceded that other services might be axed."
 
masseybrown
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RE: EU/US OpenSkies: Who Wins?

Wed Mar 14, 2007 11:51 pm

I liked Mr. Alexander's we're-doing-it-for-Europe comment.
 
kaitak
Posts: 9906
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 2:07 am

I don't care if he does it for his Auntie Tess and her pet dalmation Alfonso, as long as he does it.

Seriously, though, if he looks beyond LHR at the wider advantage to the economy, he will see that there is potential for gain for the economy. BD will be a big winner, but fares will come down because of the extra competition. And then there is the move to mixed-mode operations at LHR, which will yield quite a few new slots. WW called for this to happen more quickly a few months ago; can't imagine he'll be in a rush to call for it again.
 
bastew
Posts: 752
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 2:12 am

Some very mixed reports on the UK's position of Open Skies at the moment.

The Guardian report mentioned above seems to give the impression that the UK is now behind the deal.

But here is a report that says the UK wants a one year delay on open skies:

**BRUSSELS (Reuters) - Britain is seeking a one-year delay in opening transatlantic flights from Heathrow Airport to wider competition under a U.S.-EU aviation pact due to take effect in October, an EU source said on Wednesday.

But a U.S. official said Washington regarded the agreement concluded this month after four years of negotiation as a single package and considered talks at an end.

Diplomats said Britain was alone in voicing reservations about the "open skies" deal, meant to replace arrangements dating to World War Two, when European Union ambassadors discussed it at a preparatory meeting in Brussels.

Transport Secretary Douglas Alexander said on Tuesday that Britain was engaged in "active negotiations" with European partners and the United States ahead of a meeting of EU transport ministers on March 22 due to decide on the accord.

British Airways and Virgin Atlantic , which operate lucrative routes from Heathrow, Europe's biggest air hub, have attacked the agreement as lopsided in Washington's favour.

But rival UK airlines such as bmi and continental European carriers such as Iberia and Air France -KLM strongly support the deal.

"Britain is talking bilaterally to the Americans and to the German (EU) presidency. It wants a year's delay in opening Heathrow," the EU source familiar with the discussions said.

Officials in London declined to comment on the delay question, saying they were not familiar with details.

ONE PACKAGE

A U.S. official said: "Our view is that we have got an excellent agreement and we are looking forward to a positive decision from the (EU) Transport Council on March 22.

"We negotiated an agreement and the negotiations are over. As always in this type of agreement, it's one package."

EU diplomats said Spain, Ireland and the Netherlands spoke in support of the deal negotiated by the executive European Commission during a brief discussion among ambassadors, and no one supported Britain.

They said Britain reiterated the need for further work on the agreement and called for better guarantees that the United States would agree in a second phase of negotiations to allow European airlines to buy controlling stakes in U.S. carriers and operate flights on domestic routes in the United States.

The European Parliament threw its political weight behind the "open skies" agreement, backing a non-binding resolution supporting the deal in a show of hands in Strasbourg. ***** ENDS
 
kaitak
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 2:40 am

I am wondering why the UK should think one year will make any difference, but as the one country which is likely to veto the agreement, I guess they carry a certain weight. In effect, the UK is saying, "either we get a year's break, or we veto the deal". The US could respond by saying that "if you veto the deal at 2pm on the 22nd, Bermuda 2 will cease to exist at 2.05pm."

That said, a one year delay is not too much to ask and it could be something that TB and GB could agree to between the two of them. Even BMI might not be too much against it, because after all, how will they get new A330s between now and then (perhaps they could get A340s?). The Americans' trump card could be new slots at LHR under the transition to mixed mode operations. This is expected to happen around 2008-9, with the result that LHR should have a significant increase in slots; if US carriers can be granted some of these, then the UK can have its one year delay?

Personally, I think this should be a matter between the UK and the US. The UK will back the deal and then, the UK and US can work out a phased arrangement between them, under EU supervision.

I wouldn't blame either side (the US or EU) for rejecting this altogether, but the practicality is that keeping the UK on side for the next week is very important; if it's only a one year delay, that's far better than the alternative.
 
Humberside
Posts: 3237
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 2:52 am

Quoting JoFMO (Reply 90):
I especially like the following:


"BMI - one of the airlines pressing for change, which would challenge the grip of British Airways and Virgin Atlantic on the valuable Heathrow to London route - conceded that other services might be axed."

Not the only mistake either - "Nigel Turner, chief financial officer" - he's the chief exec
Visit the Air Humberside Website and Forum
 
scotron11
Topic Author
Posts: 1432
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RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 3:37 am

Quoting Kaitak (Reply 94):

I am wondering why the UK should think one year will make any difference, but as the one country which is likely to veto the agreement, I guess they carry a certain weight.

Maybe it's to coincide with BA's move to T5?
 
Ken777
Posts: 10078
Joined: Thu Mar 11, 2004 5:39 am

RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 5:32 am

If the UK votes against the agreement I doubt if the US Administration will cancel Bermuda 2 in retaliation. Right now Bush is having a rather rough go of it with everything from Iraq to Walter Reed and the UK is one of the few friends he has. I believe GB and TB would have a chat and no action re B2 would be taken. GB ain't gonna screw TB on this one.

Quoting Kaitak (Reply 94):
The Americans' trump card could be new slots at LHR under the transition to mixed mode operations. This is expected to happen around 2008-9, with the result that LHR should have a significant increase in slots;

That actually sounds rather reasonable to me. It will avoid a battle for any financial compensation that BA would push for if required to give up slots - and those slots have value. It also provides time for BA to work out any leasing of slots that they may decide on. I can see BA looking at leasing slots if the agreement goes through - they would make more money off of leasing than they do from the small prop jobs they fly into LHR.
 
bmiexpat
Posts: 154
Joined: Wed Sep 21, 2005 11:11 am

RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 5:43 am

Quoting Ken777 (Reply 97):
I can see BA looking at leasing slots if the agreement goes through - they would make more money off of leasing than they do from the small prop jobs they fly into LHR.

What prop jobs does BA fly into LHR?
 
IADLHR
Posts: 612
Joined: Wed Apr 27, 2005 10:25 pm

RE: EU/US OpenSkies: Who Wins?

Thu Mar 15, 2007 10:42 am

Quoting Kaitak (Reply 94):
I am wondering why the UK should think one year will make any difference

Maybe they think that in a years time opposition to the agreement will surface in the US and kill the deal. i dont think we need a one year dealy in the agreement. Too much can happen between now and than.

The UK and BA knew when the negotiations started that the possibility of an agreement existed and new US airlines would get access to LHR. They have had plenty of time to get their act together regarding slots. In addition a years delay would meanb the airlines also missing the 2008 summer peak season too. Perhaps, maybe possibly, a delay until March, 2008, a delay of a few months would be possible, but no more than that.

[Edited 2007-03-15 03:47:13]

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