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vv701
Posts: 5895
Joined: Fri Aug 19, 2005 10:54 am

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

Thu Dec 06, 2007 1:36 am



Quoting Atmx2000 (Reply 80):
Bermuda II restricted more extensive fifth freedom rights that had existed prior, basically limiting them only to West Germany and a select few other cities

Are you saying that the fifth freedom rights allowed in Bermuda2 were worthless and that first PA and then UA should not have based short haul fleets in Europe? Remember I was answering a question as to what American airlines got out of Bermuda 2 and clearly Bermuda 2 did not have to include fifth freedom rights.

Quoting Atmx2000 (Reply 80):
You are calling this compensation? So BA gets to operate both LHR-IAH with a stop and LGW-IAH nonstop.

No. Unlike some I am trying to take a balanced view. In some cases Bermuda 2 does create an uneven playing field in favour of BA, the only nominated UK airline allowed to operate from LHR in competition with PA and TW in the original agreement. And in some cases Bermuda 2 creates an uneven playing field in favour of either the two original airlines nominated to serve LHR, PA and TW, and sometimes in favour of the American airlines not allowed to serve LHR. And I certainly do not wish to take a jingoistic view.

So I am not really sure exactly what you are saying. Is it that BA has an unfair advantage in being allowed to fly IAH-DET/ORD-LHR? If so it is worth pointing out that Bermuda 2 allows both AA and UA to operate in a similar fashion. Hence UA956 used to operate SFO-JFK-LHR until UA could not stand the competitive heat on the JFK-LHR route (being at a disadvantage in not having a hub on this route) and withdrew this service at the end of the 2006 summer schedules. Similarly I believe all the following services still operate even though a change of plane may be required:

UA920. DEN-IAD-LHR
UA928. PDX-ORD-LHR
UA930. SFO-LAX-LHR
UA934. HNL-SFO-LHR

The difference between these flights and the BA IAH-ORD-LHR or IAH-DET-LHR flights is that UA can carry passengers on the first leg but BA cannot. One must assume that to operate the above services UA must see some commercial advantage, over, for example operating a PDX-ORD flight that connects with an ORD-LHR flight. But this commercial advantage is denied to BA or VS under both Bermuda 2 and the new Open Skies agreement.

Quoting Avek00 (Reply 77):
Quoting VV701 (Reply 73):
Today it is privately owned. Significantly more than 40 per cent of its equity is now in foreign mainly American hands. This, under restrictive American law, could not have happened in the USA.

Not at all true - this has already happened at least once with a major US airline (Northwest).

Are you saying that NW is more than 25 per cent foreign owned? I thought that this was illegal under US law. But is it that greater than 25 per cent ownership is legal provided that no one foreign investor owns more than a certain percentage? Or did foreign ownership once go above the legal limit and corrective action - like the issue of more stock - had to be taken?

As long as Bilateral Agreements continue to exist then foreign ownership (i.e. more than 50 per cent) is always a problem for any international airline. So in theory BA could not operate under existing bilateral agreements signed by the UK if foreign ownership exceeds 50 per cent. As their is no requirement in UK law that BA remains a British company, BA are legally required to monitor the ownership of their stock. And there is a mechanism in place to take action if foreign ownership exceeds 50 per cent.

This mechanism involves an independent British financial institution who are identified in BA's articles of association. If foreign ownership of BA Ordinary Stock exceeds 50 per cent BA are required by these articles to issue a new class of share to this institution in a number equal to the number of shares over 50 per cent owned by foreign investors plus an additional share. These special shares do not qualify for many of the benefits of the BA ordinary shares like stock dividends, stock scrip issues or participation of capital distributions if BA were to be taken over or if its assets were sold. But in a sort of contorted way they keep BA British.

As a result BA publish the actual foreign ownership of their shares on 31 March each year in their annual report issued in mid-summer (as do LH I believe for the same reason).
 
FreequentFlier
Posts: 1100
Joined: Sun Feb 25, 2007 4:30 am

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

Thu Dec 06, 2007 2:59 am



Quoting Commavia (Reply 97):
Well, being completely objective, and taking out all of the emotion, politics and West Side Story "us versus them," could you understand why it is that airlines in the United States would be a bit concerned about even more competition coming into the U.S. markets?

The U.S. market is already enormously competitive, in fact too much so, to the point that its not economically sustainable, and there are already too many airlines out there, with too many seats chasing too few dollars.

Given what U.S. airlines have had to endure in the last six years - beginning on September 12, 2001, and up until today - I would think that anyone rational (regardless of their nationality) could recognize why it is that the last thing most U.S. carriers want to deal with is even more competition.

Yes, putting aside the "my side of the pond, your side of the pond" nationalism, the argument against allowing EU carriers to serve the US domestic market is fairly elementary and simple: US airports are almost entirely unregulated by slots or gate issues whereas EU airports are heavily slot controlled. People can argue about whether this means the US is now anti-free trade (I would argue it really has nothing to do with trade), but the fact of the matter is such an agreements benefits European carriers infinitely more than it benefits American carriers. On the other hand, European owned companies in general are free to compete in the US market and do so. Others have mentioned many of these companies already.

This is a rather unique example of where the benefits of the trade agreement quite obviously benefit one side a great deal to the detriment of the other. I think anyone who argues to the contrary is ignoring the slot issue at major EU airports. Additionally, the US government does have an interest in making sure smaller markets are served and are part of the national aviation infrastructure. BA would clearly have no interest in serving the AZO's, RST's or AMA's of the US market. Without the US legacy carriers, these markets would no longer see air service. JFK-LAX, JFK-SFO and the other transcon markets BA etc would serve are already extremely well served at competitive rates, including by VX.

Finally, the US commercial aviation sector is the last means of transporting the US military in the event of a national emergency. I believe (and someone can correct me if I'm wrong) US law allows the federal government to commandeer commercial aircraft if necessary in a time of national emergency. While EU carriers, being allies, would probably help in the event of such an emergency as well, they would not be bound by such laws. Granted, this is a silly example, but if the US was hypothetically at war with the UK, having BA moving around US troops would present somewhat of a conflict of interest.

Keep in mind, I'm not even accounting for the domestic politics which shoot the deal down anyway. If EU airports were not slot controlled, there may be a case for such liberalization. Barring that, this will never see the light of day.
 
sllevin
Posts: 3314
Joined: Wed Jan 30, 2002 1:57 pm

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

Thu Dec 06, 2007 9:59 pm



Quoting VV701 (Reply 102):
This thread is not about French and German airlines. And unlike AF and LH in the 90s, unlike AA, CO, DL, NW, UA and US in the current decade, neither BA nor VS have received one penny of government aid.

That's a bit disingenuous since BA wasn't even privatized until a little more than 10 years ago. I would strongly argue that fundamentally Europe took great care to shield national airlines until very recently. Saying "well, let's ignore the past 50 years of history in favor of the last five" seems a bit unfair, don't you think?

Steve
 
David_itl
Posts: 6418
Joined: Wed Jun 27, 2001 7:39 am

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

Thu Dec 06, 2007 11:30 pm



Quoting Sllevin (Reply 103):
That's a bit disingenuous since BA wasn't even privatized until a little more than 10 years ago.

More like 20 years a plc
 
gh123
Posts: 645
Joined: Sun Aug 27, 2006 10:09 pm

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

Fri Dec 07, 2007 12:39 am

At the same time, almost the same amount of staff would be required in the US is EU airlines started flying in the US internally.

ie: Pilots, Ground Crew, Maintenance, Check-in staff etc.

Surely?!
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 12:57 am



Quoting VV701 (Reply 102):
And unlike AF and LH in the 90s, unlike AA, CO, DL, NW, UA and US in the current decade, neither BA nor VS have received one penny of government aid.

My gosh, I don't know why this is so difficult to understand - can we please stop repeating this oft-cited mythology over and over? Again, I don't know where you get this from - but none of the airlines you mentioned - none one, with the possibly exception of US, has every received "one penny of government aid" from the U.S. federal government. Not one. Not AA. Not CO. Not DL. Not NW. And certainly not UA, which tried and was rejected. These airlines didn't get subsidies, they didn't get loans, they didn't get anything. As I already said, they got a reimbursement for the government - a one-time deal - for the 72 hours they were grounded by order of the federal government. And, that reimbursement didn't even come close to actually covering the costs incurred during that period, not even close.

BA, LH, AF, etc. weren't completely shut down by order of their governments for three days back in 2001.

Quoting VV701 (Reply 102):
Indeed following 9/11 BA immediately (within three months) retired their still quite large fleet of 742s and cut their worldwide capacity by 20 per cent. This immediate response by BA management to a very changed world was necessary. It ensured that, despite the increased costs arising out of 9/11 and the downturn in the number of passengers carried, BA restricted its financial losses to one year and could continue to compete against the government subsidised American airlines. As a result BA is now consistently at the top of league of the most profitable airlines and has got their without the benefit of the Chapter 11 protection sought by DL, NW, UA and US in the interim period.

And again, respectfully, that is definitely impressive and admirable - that BA has performed so well in the recent past. But, once again, if BA had to deal with 1/10 of what U.S. airlines have had to in the last six years, it would be interesting to see how BA turned out. BA faces very little direct competition from low-cost carriers, particularly on its domestic network, where its exposure is limited a) by the relative tininess of the U.K. domestic market, and b) by the fact that BA doesn't really have much of any domestic network these days. The vast majority of BA's market is international service, where the face little to no competition, and almost completely no low-cost competition, and thus can either set the fares in the market or are forced to "compete" with other high-cost/legacy airlines like them. Further, it doesn't hurt that probably 75% of BA's global capacity stems either to or from Heathrow, probably the single most consistently high-yielding major urban-market hub on earth, where BA can command a fare premium (at least for now) that is far in excess of what virtually any U.S. airline could ever get out of their major U.S. hubs, on average.
 
jacobin777
Posts: 12262
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RE: UK Airlines Trying To Pull Plug On Open Skies?

Fri Dec 07, 2007 2:22 am



Quoting FreequentFlier (Reply 101):
US airports are almost entirely unregulated by slots or gate issues whereas EU airports are heavily slot controlled.

....JFK and ORD as well as smaller airports for practical purposes are slot-controlled...
"Up the Irons!"
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 2:34 am



Quoting Jacobin777 (Reply 107):
....JFK and ORD as well as smaller airports for practical purposes are slot-controlled...

Relatively speaking, though, the U.S. is almost entirely un-regulated and not slot-controlled.

In the U.S., the number of major hub airports serving large urban centers that have slots or substantive capacity controls is almost none - you could probably count them on two hands. On the other hand, in Europe, every single major urban hub airport of any consequence is slot-controlled.
 
DLPMMM
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Joined: Wed Apr 20, 2005 12:34 am

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

Fri Dec 07, 2007 2:46 am



Quoting Commavia (Reply 108):

I don't know why you bother. The facts don't matter for some people, they just want to argue.

Cabotage is total bullshit, and both sides know it.

The EU airlines really don't want cabotage as they know the competition will eat their lunch.

They just pretended to want it because it was not achievable.

This is all just political wanking by a bunch of you know whats (to be polite).
 
FreequentFlier
Posts: 1100
Joined: Sun Feb 25, 2007 4:30 am

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

Fri Dec 07, 2007 2:52 am



Quoting VV701 (Reply 102):
First of all there was no slot issue on either side of the Atlantic in 1979 when Bermuda 2 was signed.

But more importantly is this just hyperbole or will it prove to be true? What will be most interesting to see is how things pans out over the next 12 months.

You're sort of all over the place here. I wasn't complaining about Bermuda 2, in fact I've never mentioned it once. The point is that there are slot issues in the EU now. And the notion that the vast majority of the EU's major airports are slot controlled (and thus would be difficult for US carriers to gain market share in) is not "hyperbole". It's not even debatable. It's a fact, and you're welcome to look it up and fact check it for yourself.

Quoting Commavia (Reply 106):
And again, respectfully, that is definitely impressive and admirable - that BA has performed so well in the recent past. But, once again, if BA had to deal with 1/10 of what U.S. airlines have had to in the last six years, it would be interesting to see how BA turned out. BA faces very little direct competition from low-cost carriers, particularly on its domestic network, where its exposure is limited a) by the relative tininess of the U.K. domestic market, and b) by the fact that BA doesn't really have much of any domestic network these days. The vast majority of BA's market is international service, where the face little to no competition, and almost completely no low-cost competition, and thus can either set the fares in the market or are forced to "compete" with other high-cost/legacy airlines like them. Further, it doesn't hurt that probably 75% of BA's global capacity stems either to or from Heathrow, probably the single most consistently high-yielding major urban-market hub on earth, where BA can command a fare premium (at least for now) that is far in excess of what virtually any U.S. airline could ever get out of their major U.S. hubs, on average.

I think people outside the US don't realize just how competitive the US market really is. EVERY single market of any size in the United States has LCC service at this point, and in most cases it's from 3 to 4 LCCs, not 1. And it's not LCC service to the secondary airports, it's to the MAIN city airport. US carriers were not at liberty to immediately reduce capacity by 20% after 9/11 because doing so would have resulted in significant market share being ceded to LCCs. I'm not trying to take away from BA's success, which has been substantial and profound, but comparing the actions of BA to US legacies post 9/11 is comparing two markets that are like apples and oranges.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Fri Dec 07, 2007 2:57 am



Quoting Commavia (Reply 108):

Relatively speaking, though, the U.S. is almost entirely un-regulated and not slot-controlled.

..true but most EU carriers probably don't want to fly to locations such as IND either (no disrespect to IND).... Wink
"Up the Irons!"
 
BAxMAN
Posts: 655
Joined: Fri May 28, 2004 7:51 am

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

Fri Dec 07, 2007 3:01 am



Quoting Commavia (Reply 106):
BA faces very little direct competition from low-cost carriers, particularly on its domestic network, where its exposure is limited a) by the relative tininess of the U.K. domestic market, and b) by the fact that BA doesn't really have much of any domestic network these days

What!????!

The Loco's have pretty much driven BA out of all domestic markets other than those routes that provide feed into the LHR operation (with the LGW feed rapidly decreasing).

Quoting Commavia (Reply 106):
The vast majority of BA's market is international service, where the face little to no competition, and almost completely no low-cost competition, and thus can either set the fares in the market or are forced to "compete" with other high-cost/legacy airlines like them.

What!????!

Whilst Loco competition from LHR is minimal, the competition from London is enormous. STN and LTN are the holy grail for all European loco carriers and have seen BA/GB Airways struggle on many routes such as the Baltics and the Med.

BA (and other European carriers) are also far more affected by the emerging Asian carriers such as QR and EY, plus the established SQ, CX, EK etc. Many of these rival carriers are propped up by their home state and benefit from very, very cheap imported labour from poorer Asian countries at levels that no European carrier could ever contemplate matching. These carriers deliver a top-notch product in the air and can syphon off a huge amount of premium traffic. They have pretty much closed off Australia to all but a few European carriers. You really can't over-estimate this competiton.

As for your insinuation of some kind of collusion in matching fares (and thus reducing competition), you are being very blinkered if you do not think this happens in the USA. You could essentially choose 2 random cities such as SAN and BNA (Titties play the Chargers this weekend), and you can be pretty much assured that published fares with AA via DFW, CO via IAH, DL via ATL etc will match each other to within a few bucks.
Mild green Fairy liquid
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 3:06 am



Quoting Jacobin777 (Reply 111):
..true but most EU carriers probably don't want to fly to locations such as IND either (no disrespect to IND)....

But they might want to fly to Atlanta, Austin, Baltimore, Boston, Charlotte, Cincinnati, Cleveland, Dallas, Denver, Detroit, Fort Lauderdale, Hartford, Houston, Kansas City, Las Vegas, Miami, Minneapolis, Nashville, Oakland, Ontario, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Raleigh/Durham, St. Louis, Salt Lake City, San Antonio, San Diego, San Francisco, San Jose, Seattle, Tampa, and/or Washington/Dulles - among others - all of which are large-to-massive U.S. markets with no slot controls or little capacity restriction.

I don't think one could make a list that long of cities in Europe - of relatively equal size and market breadth - whose airports have little to no slot controls or capacity restrictions.
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

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

Fri Dec 07, 2007 3:16 am



Quoting Commavia (Reply 106):
Quoting VV701 (Reply 102):
And unlike AF and LH in the 90s, unlike AA, CO, DL, NW, UA and US in the current decade, neither BA nor VS have received one penny of government aid.

My gosh, I don't know why this is so difficult to understand - can we please stop repeating this oft-cited mythology over and over? Again, I don't know where you get this from - but none of the airlines you mentioned - none one, with the possibly exception of US, has every received "one penny of government aid" from the U.S. federal government. Not one. Not AA. Not CO. Not DL. Not NW. And certainly not UA, which tried and was rejected.

Let me add one thing to this, it was not originally US that got the aid. It was HP that got the aid and paid it back in full a couple years ago. And yes, HP was the only US airline that got the aid after 9/11. Everybody else got rejected.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 3:18 am



Quoting BAxMAN (Reply 112):
The Loco's have pretty much driven BA out of all domestic markets other than those routes that provide feed into the LHR operation (with the LGW feed rapidly decreasing).

Like I said, BA doesn't have much exposure to these markets since they no longer really operate in said (domestic U.K.) markets. But again, the point remains: even if BA faced low-fare competition on 100% of their domestic routes (which they don't, as pretty much all the domestic routes they have left now are ex-Heathrow), their domestic market makes up, maybe, what?, 15% of their network. I doubt if its even that much. Contrast that with the U.S. which is so vastly larger, and thus where airlines are exposed to domestic low-cost carriers on a far greater proportion of their network - the majority in virtually every case.

Now again, I'm not complaining about that - it's the natural function of the market. The U.S. is 40 times larger than Britain, so it only makes sense that the (equally highly competitive and low-cost-prone) domestic market will be much larger in the U.S. That is reality, of course, and we all accept that. But it doesn't change the fact that U.S. carriers face far more low-cost competition - directly - on far more of their networks than BA ever has, and I suspect ever will.

Quoting BAxMAN (Reply 112):
Whilst Loco competition from LHR is minimal, the competition from London is enormous. STN and LTN are the holy grail for all European loco carriers and have seen BA/GB Airways struggle on many routes such as the Baltics and the Med.

The fact that "Loco competition from LHR is minimal" is a pretty critical point, as you and I both know that in the London market, the gulf in the difference in levels of cost, service and prestige associated with Heathrow versus Stansted or Luton is immense. Saying that BA faces competition on much of their network just because Stansted and Luton are major low-cost hubs ignores the fact that, despite your assertions to the contrary, said competition from across town doesn't seem to be putting a dent into BA's yield premium at Heathrow one bit. At Gatwick, maybe, which is why BA has largely retreated out of there just like in the regions, but not at Heathrow, where BA still - on average - commands a fare premium that would be the envy of 95% of the world's airlines.

Quoting BAxMAN (Reply 112):
BA (and other European carriers) are also far more affected by the emerging Asian carriers such as QR and EY, plus the established SQ, CX, EK etc. Many of these rival carriers are propped up by their home state and benefit from very, very cheap imported labour from poorer Asian countries at levels that no European carrier could ever contemplate matching.

Sure, BA and other European legacies are now having to compete with well-funded Gulf carriers. Okay, so now - for the first time, really - they are facing substantive competition on some of their longhaul networks.

And yet, nonetheless, you don't see BA fares to Dubai dropping by half in the last year, or to Johannesburg by 2/3. Again, competition from Emirates notwithstanding, BA still commands a massive fare premium at their only real hub - Heathrow - whereas, in the U.S., legacies are faced with low-cost competition at many if not most of their hubs, and face competition in the vast majority of the markets they serve.

Quoting BAxMAN (Reply 112):
As for your insinuation of some kind of collusion in matching fares (and thus reducing competition), you are being very blinkered if you do not think this happens in the USA.

I insinuated no such thing.

What I stated - pretty clearly, I thought, without any insinuation - is that in markets where BA operates largely as a duopoly with another airline, they don't ever really have to worry about major competition driving down their yields. In most cases, the other airline BA is competing with ex-Heathrow - whether Virgin or the foreign market's home carrier - are just as eager to get a massive revenue premium ex-Heathrow as BA, and thus are in no hurry to drop fares to compete. With a market as massive, dynamic and controlled as Heathrow, there is no need for any airline - BA or otherwise - to really lower fares dramatically: the market easily supports the high fares now as it is because of how tightly constrained capacity is.

That's not insinuating collusion, that's just a statement of reality.

Quoting BAxMAN (Reply 112):
You could essentially choose 2 random cities such as SAN and BNA (Titties play the Chargers this weekend), and you can be pretty much assured that published fares with AA via DFW, CO via IAH, DL via ATL etc will match each other to within a few bucks.

Of course airlines will be competitive, that's obvious, isn't it?

The point I was making is not that AA prices its SAN-BNA itineraries 20% lower than CO on average. That would never happen - airlines match each other's fares all the time. What I'm saying is that both AA and CO - to say nothing of UA, NW, DL, US, etc. - have all had to lower their SAN-BNA itineraries by 20%, or more, or had to artificially keep their itineraries 20% lower even in the face of spiking fuel prices, etc. because of direct low-cost competition from airlines like Southwest, Frontier, AirTran, JetBlue, etc.
 
vv701
Posts: 5895
Joined: Fri Aug 19, 2005 10:54 am

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

Fri Dec 07, 2007 3:32 am



Quoting Sllevin (Reply 103):
That's a bit disingenuous since BA wasn't even privatized until a little more than 10 years ago.

I am sorry but this is factually wrong. BA was privatised in February 1987, more than twenty years ago which is not 'a little more than 10 years ago'. Further the intention to privatise was announced by the British government in July 1979, not far off thirty years ago. To demonstrate that BA was financially viable the British government also announced on that date that there would be no repeat of their disastrous interference over the previous 33 years when all major decisions regarding BEA and BOAC and then, from 1974, BA were made not by the airlines management but by civil servants and government ministers. As a result of implementing this policy the privatisation was a great success and not a total failure as BA had in that period changed from meaning 'bloody awful' to being able to call itself somewhat ostentatiously 'the world's favourite airline'.

Quoting Sllevin (Reply 103):
Saying "well, let's ignore the past 50 years of history in favor of the last five" seems a bit unfair, don't you think?

No. Saying lets ignore the past 28 years of history in favour of the previous 33 is not just unfair. I think it is ridiculous.

Quoting Commavia (Reply 106):
My gosh, I don't know why this is so difficult to understand - can we please stop repeating this oft-cited mythology over and over? Again, I don't know where you get this from - but none of the airlines you mentioned - none one, with the possibly exception of US, has every received "one penny of government aid" from the U.S. federal government.

I do not doubt the veracity of this statement. And I appreciate that 9/11 hit US airlines much harder than British airlines. But in the UK commercial aviation is . . . Well, 100 per cent commercial. What this means in practical terms is that the UK government lays down its operational and regulatory parameters either directly or through the CAA (Civil Aviation Authority, the British equivalent of the FAA). It is then the responsibility of the airports like LHR and LGW which are owned by public corporations and the airlines to implement them at their and not the tax payers' cost.

Now this simply is not the case in the USA. There there are huge Federal operational subsidies. For one example I refer you to the US Department of Homeland Security Act 2004. This authorises the expenditure of no less than US $3.679 billion of Federal funds 'to provide civil aviation security services' over, I believe, a period of 12 months. The brake down of this huge subsidy was:

US $ 1.673 billion for 'passenger screening activities'
US $ 1.285 billion for 'baggage screening activities'
US $ 0.721 billion for 'airport support and enforcement'
US $ 0.235 billion for 'physical modifications to airports'
US $ 0.100 billion for 'procurement of explosive detection systems'

For further detail simply google 'Homeland Security Act 2004'. You will probably also find a report by Gerald Dillingham, Director of Civil Aviation at the GAO (General Accounting Office) to the US Senate's Committee on Commerce, Science and Transportation on the same subject. It also makes interesting reading.

BAA own several UK airports including LHR and LGW. They are a subsidiary of a Spanish construction corporation. That have been responsible for implementing and paying for all the increased security measures at their airports that have been required by the UK government as well as those required by the American government for aircraft and passengers travelling to the USA.

BAA has but two sources of income, the charges made of airlines using its airports and the rents it gets from shops and other commercial activities at its airports. So the costs of these security activities are in the main indirectly born by the airlines and, through them, their passengers. British airlines have also been responsible for paying for all on-board security improvements required by the government. Here I understood that in the USA there was Federal financial help in implementing activities like improved security to the door to an aircraft's cockpit. But I am happy to be corrected if this understanding is wrong.

I can understand that you may not regard the Federal payments I have detailed above as being a subsidy. But when you understand that, at least here in the UK, those often very same changes have been paid for by the airport operators or the airlines with no government financial support, you will see why many of us regard them as direct subsidies.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 3:44 am



Quoting VV701 (Reply 116):
What this means in practical terms is that the UK government lays down its operational and regulatory parameters either directly or through the CAA (Civil Aviation Authority, the British equivalent of the FAA). It is then the responsibility of the airports like LHR and LGW which are owned by public corporations and the airlines to implement them at their and not the tax payers' cost.

It's exactly the same in America. The government sets regulations, and airlines and airports follow them.

Quoting VV701 (Reply 116):
There there are huge Federal operational subsidies. For one example I refer you to the US Department of Homeland Security Act 2004. This authorises the expenditure of no less than US $3.679 billion of Federal funds 'to provide civil aviation security services' over, I believe, a period of 12 months. The brake down of this huge subsidy was:

That's not a subsidy in the slightest. Airlines and passengers pay for those things - and they probably pay more than do Europeans for them! If anything, our current costly and government-controlled (unfortunately) security regime in the U.S. is a competitive disadvantage for U.S. airlines.

Quoting VV701 (Reply 116):
So the costs of these security activities are in the main indirectly born by the airlines and, through them, their passengers. British airlines have also been responsible for paying for all on-board security improvements required by the government. Here I understood that in the USA there was Federal financial help in implementing activities like improved security to the door to an aircraft's cockpit.

Once again, no. Just as in the U.K., the cost of security in the U.S. are borne by airlines and their passengers, but mostly the airlines themselves, which - because of the difficult and hyper-competitive pricing environment - end up having to pay most of the security fees and surcharges themselves.

There is no "federal financial help" whatsoever in "implementing activities like improved security" whatsoever. The government gets paid - far, far too much - to do those things.

And as for the cockpit doors - I don't know where you got that from. Reality is actual the exact opposite of what you said - not only did the government not pay the airports for fortifying the cockpits, but they regulated it and forced airlines to bear 100% of the cost. Immediately after 9/11 - within a matter of hours - several airlines had already begun work on developing strengthened cockpit door systems in-house with their maintenance organizations. They were way, way out in front of the government on that (big surprise). However, when the time came around for the government to regulate what the airlines had already been doing on their own, the government didn't reimburse them at all for it.

It's ironic that you should make this point - as it was actually a major, major bone of contention from the airlines after 9/11, that they were having to bear massive, massive security-related costs (the cockpit doors were just the tip of the iceberg) - and that these costs were really national security measures, and thus they should be reimbursed for some of them. They were not, however, reimbursed for the cockpit doors or their other security measures.

Quoting VV701 (Reply 116):
But when you understand that, at least here in the UK, those often very same changes have been paid for by the airport operators or the airlines with no government financial support, you will see why many of us regard them as direct subsidies.

And while I respect your reasoned argument, I wish you would recognize why we - who actually live here in America and utilize these supposedly "subsidized" services constantly - know that you are patently wrong. Security in the United States is not subsidized in the slightest - if anything, it costs more here than there, because we have the nightmare bureaucratic middleman of the government in between the people who pay for security (us, the customers) and where the money gets spent (the checkpoints). The money still flows in exactly the same way from taxpayers (i.e., fare-paying passengers) to security services. The only difference is that for you the taxes and fees are note as explicit, but rather just lumped into the ticket price, and then paid out by airlines directly for security or indirectly through fees paid to airports who in turn pay for security.

But, as a tax-paying American who already thinks they pay far, far too much for the "security" we have as it is, take it from me: it is most definitely not subsidized, except for being subsidized by passengers!
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Fri Dec 07, 2007 4:56 am



Quoting Commavia (Reply 113):
But they might want to fly to Atlanta, Austin, Baltimore, Boston, Charlotte, Cincinnati, Cleveland, Dallas, Denver, Detroit, Fort Lauderdale, Hartford, Houston, Kansas City, Las Vegas, Miami, Minneapolis, Nashville, Oakland, Ontario, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Raleigh/Durham, St. Louis, Salt Lake City, San Antonio, San Diego, San Francisco, San Jose, Seattle, Tampa, and/or Washington/Dulles - among others - all of which are large-to-massive U.S. markets with no slot controls or little capacity restriction.

....I'm not so sure how this would apply to international carriers..... confused .....maybe you could be a little more clear...thanks... Smile
"Up the Irons!"
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 5:34 am



Quoting Jacobin777 (Reply 118):
....I'm not so sure how this would apply to international carriers..... confused .....maybe you could be a little more clear...thanks... Smile

All I'm saying is that any of the cities listed above - and then some - are pretty much wide open for anybody who wanted to to come in, set up shop, and build as big an operation as they want assuming they have the resources and commitment to invest in the necessary facilities, equipment aircraft, people, etc. The airports themselves are not a barrier to market entry - there aren't substantive slots or capacity restrictions, or limits on flights or operations, etc.

The reason I think this is topical in the context of the U.S.-E.U. bilateral issues is that the Europeans want access to the above - access to a wide-open landscape where they can fly, with few exceptions, anywhere, anytime, anyhow, without having to answer to anyone, buy any slots, etc. The same is far from true in reverse, though: if an American carrier were given the rights to fly within the E.U. carrying local E.U. customers, and wanted to do so, it would be virtually impossible.

There is no major metropolitan airport of substance in Europe that is not heavily capacity-restricted and/or slot-controlled, with - in most cases - all of the desirable and attractive slots already taken. Therefore, any prospective U.S. carrier would be effectively locked out of these markets in practice, even if a piece of paper says that - in theory - they have the right to fly anywhere they want to and from said markets.

That is why many feel that the U.S. giving up cabotage would be unfair, because the U.S. would be trading away free and open access to the world's largest aviation market, and get essentially nothing in return.
 
ANother
Posts: 1833
Joined: Thu Nov 03, 2005 2:47 am

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

Fri Dec 07, 2007 8:40 am



Quoting Commavia (Reply 119):
That is why many feel that the U.S. giving up cabotage would be unfair, because the U.S. would be trading away free and open access to the world's largest aviation market, and get essentially nothing in return.

Forget cabotage - keep the rule that only US based airlines (and supervised by your DOT/FAA) can fly US domestic routes with US citizen labour.

What you need to do is to change the ownership and control rules. Why should a US airline have a US citizen CEO? Why does everyone involved in fleet planning have to be Americans? Change it to US residents - i.e. legal immigrants holding a valid green card. In Europe (and I think almost everywhere else) a US citizen (legal immigrant) can be CEO, or work without restrictions at any airline.

And let non-US citizens own US airlines. Let UA and LH become "United Lufthansa" and Let DL join Air France-KLM (although the probably would want to work on that name). The UA and DL parts would still be subject to safety oversight from your government.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 8:49 am



Quoting ANother (Reply 120):
What you need to do is to change the ownership and control rules.

For many in America, that is effectively the same - in practice - as cabotage. To this school of thought, letting a foreigner own a U.S. airline is the same as letting a foreigner set up their own U.S. airline.

Quoting ANother (Reply 120):
Why should a US airline have a US citizen CEO? Why does everyone involved in fleet planning have to be Americans? Change it to US residents - i.e. legal immigrants holding a valid green card. In Europe (and I think almost everywhere else) a US citizen (legal immigrant) can be CEO, or work without restrictions at any airline.

I think that's reasonable. Letting non-citizens run U.S. airlines isn't any big deal to me, and I doubt that single item - in and of itself - would arouse much opposition within the U.S. (After all, most organized labor already wants to ditch their American CEOs as it is now, anyway.)

Quoting ANother (Reply 120):
And let non-US citizens own US airlines.

But there again, you then effectively letting foreigners have cabotage in the United States. If Air France can't actually fly its own aircraft with its own crews within the U.S., but can just buy a U.S. airline and do it, then effectively they can operate in the U.S. market.
 
vv701
Posts: 5895
Joined: Fri Aug 19, 2005 10:54 am

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

Fri Dec 07, 2007 1:09 pm



Quoting Commavia (Reply 117):
That's not a subsidy in the slightest. Airlines and passengers pay for those things - and they probably pay more than do Europeans for them! If anything, our current costly and government-controlled (unfortunately) security regime in the U.S. is a competitive disadvantage for U.S. airlines.

Thank you for your clarification. But I am still having difficulty in understanding, for example, how a central government payment of US $ 3.679 billion on airline and airport security is not a subsidy.

Does this money come specifically from a levy placed on the airlines that is ring fenced from other sources of Federal income? Or are we simply talking semantics? By this I mean that the approach could be that central government - as here in the UK - orders the implementation of additional airline security measures. The airlines and airport operators implement those changes out of current income. As a result the airline and/or airport looses money. To save the airline from going out of business (in the absence of a Chapter 11 safety net) the government then directly subsidises the airline by a once-off or a regular annual payment from central funds to bcover the cost of the additional security measures.

Frankly although I have skimmed through the difficult to read Department of Homeland Security Act 2004 (so could have missed a salient point) and have also read Gerald Dillingham's more readable presentation to the US Senate Committee I found no reference to the sums of money I discussed earlier coming from anywhere other than general Federal central funds or being ring fenced in any way. Either way I would welcome clarification. And if the monies do not come directly from levies on airports and/or airlines and if the money is not ring fenced then in my mind there is no difference between the free provision of these services and any other subsidy.

Perhaps your view is that where A (in this case the US Government) provides a (security) service to B (in this case a US airline or airport) paid for by the central government exchequer is not a subsidy. Perhaps this remains your view even when you learn that elsewhere (as in the UK) the government requires similar (security) services to be provided and for these services to be paid for out of B's (in this case a UK airline or airport) regular income. But would it continue to remain your view if a central government required airlines and airports to implement certain proscribed security measures out of their own resources and, at a later date directly subsidised those specific activities by making a direct payment to the airline or airport? And if it did how would you distinguish this subsidy from, for example, a cash payment made by central government to 'compensate' the airline for the costs of conforming to FAA/CAA safety requirements.

Here, for example, BA and, as far as I am aware, AF received not one penny of government money towards the extensive modifications required to their aircraft to get Concorde back in the air after the CDG Concorde crash. If such a payment had been made I would clearly see it as a subsidy. From what you are saying (if I am interpreting you correctly) is that if central government had paid for the safety modifications it required before it would reissue a certificate of airworthiness it would not have been a subsidy because the modifications were imposed by the government so the government should use taxpayers' oney to cover the cost.

I recognise the danger of bringing Concorde into a discussion on subsidies. So let me point out that BA's first six aircraft were purchased at a cost of £ 25 million (US $ 50 million) each (which was worth a lot more than today's value back in the late 1960s) and that PA and other airlines were offered the aircraft at the same unit price. However you would be right to point out that at that price the R&D costs would not have been recovered until after many hundreds of aircraft had been sold. You would also be right to point out that having funded (subsidised) the manufacturer to produce 20 aircraft, the British and French governments found themselves the proud owner of one Concorde each. The British sold their unwanted aircraft to BA for £1.00. But AF got a much better deal as the FF1.00 they paid for the French government's aircraft was around one tenth the cost of BA's seventh aircraft! However you should also recognise that after its sale this unwanted aircraft remained parked at LHR in an all-white colour scheme for more than four years (being used as a source of spares) before BA bit the bullet and expended the necessary engineering and other costs to make the aircraft airworthy. Whether or not this expenditure took the overall cost of that aircraft to anywhere near £25 million only BA and its accountants knew.
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Fri Dec 07, 2007 2:15 pm



Quoting ANother (Reply 120):
And let non-US citizens own US airlines. Let UA and LH become "United Lufthansa" and Let DL join Air France-KLM (although the probably would want to work on that name). The UA and DL parts would still be subject to safety oversight from your government.

Why would the USA allow non-USA citizens to own a USA airline? The EU does not let non-EU citizens own EU airlines!

The only difference between the 2 parties at this point is whether the non-citizen restriction is 25% or 49%.

Who is to say which % is proper.

This whole argument is bollocks!
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

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

Fri Dec 07, 2007 2:28 pm



Quoting VV701 (Reply 122):
Thank you for your clarification. But I am still having difficulty in understanding, for example, how a central government payment of US $ 3.679 billion on airline and airport security is not a subsidy.

Because the government isn't "paying" the airlines - it's paying its own federal employees who now act as airport screeners. And it's not just minting the money out of thing air. The money is being paid to the government by airlines and their passengers, although mostly be the airlines.

Quoting VV701 (Reply 122):
Does this money come specifically from a levy placed on the airlines that is ring fenced from other sources of Federal income?

Indeed it does.

Every airline ticket in the United States carriers countless fees, surcharges and taxes that are all related to different statutes and rules - some going back decades. These fees, surcharges and taxes are collected by airlines from their customers, and then passed on to the government - some go into big pots to be allocated and spent based on discretionary expenditures at the federal level, while others are specifically earmarked (or at least are supposed to be) for specific items, like security, for example.

In fact, when you purchase an air ticket in the United States these days, most airlines' itemized readout of the taxes and fees will usually including an item specifically labeled "September 11th Security Fee." Doesn't get much more explicit than that.

Quoting VV701 (Reply 122):
Or are we simply talking semantics?

Well, I think we are, but I respect your opinion if you disagree.

Quoting VV701 (Reply 122):
From what you are saying (if I am interpreting you correctly) is that if central government had paid for the safety modifications it required before it would reissue a certificate of airworthiness it would not have been a subsidy because the modifications were imposed by the government so the government should use taxpayers' oney to cover the cost.

I'm trying my best to follow your points.

The bottom line point I was trying to make is that airlines in the U.S. have not - in the slightest - received a "subsidy" from the federal government to reimburse them for their additional security costs and measures. Not even close. If anything, the government has placed substantial, additional, and undue burden on the airlines to bear this cost. That's the airlines' contention. If you think that U.S. air carriers have gotten a subsidy to pay for their security costs post-9/11, you should go check with them: they're all still trying to get the government to reimburse them, and to no avail as of yet. Like I said earlier, it's a major bone of contention, in fact, with U.S. airlines right now - they claim that they have had enormous financial burden placed on them by additional regulation and procedure in the post-9/11 world and they haven't been compensated for any of it, which they feel they should as they consider these expenses a matter (and expense) of national security.
 
vv701
Posts: 5895
Joined: Fri Aug 19, 2005 10:54 am

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

Fri Dec 07, 2007 2:58 pm



Quoting DLPMMM (Reply 123):
Why would the USA allow non-USA citizens to own a USA airline? The EU does not let non-EU citizens own EU airlines!

The only difference between the 2 parties at this point is whether the non-citizen restriction is 25% or 49%.

The 25 per cent US ownership rule is a law. The 49 per cent rule to which you refer to is not a law. To me this is a very significant, non-numerical difference.

The only reason that there is a 49 per cent rule which may not but usually does apply to EU airlines, is the large number of restrictive bilateral agreements that still operate, These include Bermuda 2 between the USA and the UK.

The Bermuda 2 agreement, for example, allows any British airline to operate between LGW and certain USA cities listed in the agreement. It does not allow non-British or non-American airlines the same advantage. So while SQ owns only 49 per cent of VS, VS can operate under Bermuda 2 and, for example the bilateral UK-India agreement. But it could not operate under these agreements if it was 51 per cent owned by SQ.

So the decision by VS as to whether it wants to retain the benefits of operating under international bilateral agreements in which the UK is one party is down to the current VS owners and not the British courts. The decision as to who can own more than 25 per cent of any American airline is, as you know, a very different matter.

As a result of this situation some EU airlines that are wholly privatised and whose stock is freely traded (without any restrictions) and are dependant on continued national ownership for much of their business have special clauses written into their terms of association. BA is one such airline. It carefully monitors foreign (non-British) ownership of its shares. If it were to find that foreign ownership has gone above 50 per cent it will under its articles of association immediately issue special shares numerically equal to the excess of foreign ownership over 50 per cent plus one share to a nominated independent British financial institution. These new shares specifically exclude all of the rights enjoyed by the owners of BA's ordinary stock but, by a complex mechanism, allow BA to remain British.

The net result of this is that if you read the Annual Report of airlines like BA and LH you will find the level of foreign ownership at the end of their previous financial year is clearly stated. (In their last reports both of these airlines had foreign ownership levels of well over 40 per cent but less than half,)
 
ANother
Posts: 1833
Joined: Thu Nov 03, 2005 2:47 am

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

Fri Dec 07, 2007 3:17 pm



Quoting DLPMMM (Reply 123):
The EU does not let non-EU citizens own EU airlines!

The EC (not the EU) is not against changing this - but as VV701 points out, it does complicate the assignment of route rights.

Taking it in steps the EC has been given the mandate to renegotiate ALL ASAs between any EU Member States and thrid countries to either get rid of ownership requirements or, at a minimum, to change it from nationals of one Member State to nationals of any Member State. They have achieved this with over 35 countries so far.

However many in the Commission would agree that any ownership requirements are contrary to their free-market principles. They would agree to it in a minute, if it was reciprocal (as I said around 100 posts ago).
 
Byrdluvs747
Posts: 2540
Joined: Thu Jul 15, 2004 5:25 am

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

Fri Dec 07, 2007 6:51 pm

After reading this whole thread it seems that the European members here just don't want to admit that they are offering very little in trade when it comes to the issue of cabotage.

With the following issues on the table, it seems rather obsurd to be demanding full domestic rights.

-Military reserve charters
-Cherry picking by Euro carriers. Small US markets will not be served
-European subsidies that still occurr. For those that don't understand our laws, Ch. 11 is not a subsidy.
-Heavy train competition in Europe
-EU airport slots mostly allocated to EU airlines.

I'd like to hear from our European members how the EU would/should address these issues before demanding we open our markets.
The 747: The hands who designed it were guided by god.
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

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

Fri Dec 07, 2007 7:47 pm



Quoting ANother (Reply 120):
What you need to do is to change the ownership and control rules.

No, we don't. I have said this countless times and I'm going to say it again: We do things alot differently than you do. Just because you do things differently does not mean that WE have to.

Quoting ANother (Reply 120):
Why should a US airline have a US citizen CEO? Why does everyone involved in fleet planning have to be Americans? Change it to US residents - i.e. legal immigrants holding a valid green card.

Uhhh...there are already legal immigrants with a green card working the ramp at various U.S. airports... And the law is the law. You MUST prove the legal right to work in the U.S. by a green card or a birth certificate and be currently residing in the U.S.

Quoting VV701 (Reply 122):
how a central government payment of US $ 3.679 billion on airline and airport security is not a subsidy.

I give you TWO anwsers: American John Q. Taxpayer, and the paying passenger is your subsidy.  wave  You realize that Americans do actually pay taxes into the U.S. government, don't you? I do...I pay them everyday, sales tax, income tax, etc etc...
A Safe Flight Begins With Quality Maintenance On The Ground.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Fri Dec 07, 2007 7:58 pm



Quoting Commavia (Reply 119):

All I'm saying is that any of the cities listed above - and then some - are pretty much wide open for anybody who wanted to to come in, set up shop, and build as big an operation as they want assuming they have the resources and commitment to invest in the necessary facilities, equipment aircraft, people, etc. The airports themselves are not a barrier to market entry - there aren't substantive slots or capacity restrictions, or limits on flights or operations, etc.

.....there are really no large enough profitable markets (for European carriers) for many of the airports you listed.....again, as I stated previously, for practical purposes airports such as JFK and ORD are "slot restricted", especially in JFK's case.

Playing devils advocate  devil , Bermuda 2 didn't shut out U.S. carriers, AA/UA are allowed to fly to LHR....that being said, I don't believe some cities such as DFW and IAH should be blocked out..if AA wanted to fly DFW-LHR it should have been able to given that AA is already flies to LHR.

Playing devil's advocate once again devil  devil , some British carriers were also prevented from flying LHR-USofA..it works both ways.

At the end of the day, the Open Skies deal was struck on the basis of further negotiations with the U.S. Government giving EC carriers more liberal rights within the United States with the possibility of the EC revoking LHR-rights if a deal wasn't finalised by "x"-amount of time.

The various governments, including that of the USofA has signed it and should now live up to its end of the bargain. If it doesn't live up to its end of the agreement (which according to the article doesn't look like its going to happen anytime soon) then the British Government certainly has a right to protest as well as implement its pre-Open Skies restrictions...

Quoting Commavia (Reply 119):
if an American carrier were given the rights to fly within the E.U. carrying local E.U. customers, and wanted to do so, it would be virtually impossible.

"Although U.S. airlines will be allowed to fly within Europe under open skies, European airlines won't be allowed to do the same here. So, for example, American Airlines could fly from New York to London, then pick up additional passengers and shuttle them to Berlin, but Virgin couldn't go from London to New York and then on to Chicago with new passengers."**

**:latimes.com 03/2007

Whether they can compete with EU legacies or LCC's or not is irrelevant....and just like the way European carriers will have problems accessing JFK, ORD, etc. for slots, US carriers will probably have the same problem for certain airports..but again, that isn't the problem of the EC.....

..for the record, I'm "open" for Open Skies (no pun intended). If CO or DL wants to fly JFK-LHR-BAH and can get the slots to do so, then it should very well be able to. Just like I believe if VS wants to fly LHR-JFK-HNL it should have a right to do so also.
"Up the Irons!"
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Fri Dec 07, 2007 8:21 pm



Quoting Jacobin777 (Reply 129):
for the record, I'm "open" for Open Skies (no pun intended). If CO or DL wants to fly JFK-LHR-BAH and can get the slots to do so, then it should very well be able to. Just like I believe if VS wants to fly LHR-JFK-HNL it should have a right to do so also

You are comparing 5th freedom rights (JFK-LHR-BAH) and cabotage (LHR-JFK-HNL).

Quoting Jacobin777 (Reply 129):
"Although U.S. airlines will be allowed to fly within Europe under open skies, European airlines won't be allowed to do the same here. So, for example, American Airlines could fly from New York to London, then pick up additional passengers and shuttle them to Berlin, but Virgin couldn't go from London to New York and then on to Chicago with new passengers."**

Not that any USA carrier would want to waste a valuable LHR slot pair in flying to Berlin. The EU can keep those rights to intra-EU flights for all the USA cares.

Quoting Jacobin777 (Reply 129):
At the end of the day, the Open Skies deal was struck on the basis of further negotiations with the U.S. Government giving EC carriers more liberal rights within the United States with the possibility of the EC revoking LHR-rights if a deal wasn't finalised by "x"-amount of time.

Promising further negotiations does not mean promising to capitulate. This was just a face saving clause for the EU negotiators. Everyone knows that the negotiations will go nowhere.

If the EC wants to revoke LHR rights, no problem. I think that the revocation of rights for EC airlines to fly to the USA from LHR would be a proportionate response.

Quoting Jacobin777 (Reply 129):
The various governments, including that of the USofA has signed it and should now live up to its end of the bargain. If it doesn't live up to its end of the agreement (which according to the article doesn't look like its going to happen anytime soon) then the British Government certainly has a right to protest as well as implement its pre-Open Skies restrictions...

The USA said it will negotiate, not concede. If the USA negotiates, it has lived up to the agreement. If the UK or EC want to unilaterally impose restrictions, it is their right. It would also be within the USA's rights to impose actions in kind.

This is all just another argument about nothing. Political and economic realities are what they are. USA Cabotage for EC airlines and foreign ownership of USA airlines will not happen for the forseeable future.

The rest is all just a bunch of hot air.
 
LHRBlueSkies
Posts: 321
Joined: Tue Jan 16, 2007 4:23 am

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

Fri Dec 07, 2007 8:53 pm



Quoting DLPMMM (Reply 130):
This is all just another argument about nothing. Political and economic realities are what they are. USA Cabotage for EC airlines and foreign ownership of USA airlines will not happen for the forseeable future.

If US really wants competition, then open itself up to true competition from all the worlds carriers, not just EU one's. I'm sure they'd soon find out that they are not as good as they think.
flying is the safest form of transport - until humans get involved!
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Fri Dec 07, 2007 8:58 pm



Quoting LHRBlueSkies (Reply 131):
If US really wants competition, then open itself up to true competition from all the worlds carriers, not just EU one's. I'm sure they'd soon find out that they are not as good as they think.

Who said that the US really wants more competition on domestic routes? We already have 5 of the 6 largest airlines in the world flying domestically. Too little competition is not a major problem in the USA aviation market.
 
gigneil
Posts: 14133
Joined: Fri Nov 08, 2002 10:25 am

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

Fri Dec 07, 2007 9:21 pm



Quoting Ikramerica (Reply 13):
while pulling VX's cert.

It is LITERALLY impossible to do so. I would raise holy hell to my useless house delegate if it did.

Virgin America is an American company with American employees and I will be goddamned if I let childish "retaliation" stand in the way of jobs for our citizens and a quality product in our marketplace.

Globalization is here. Get out of the way of it. No matter what name is on the planes, if Delta goes out of business because BA suddenly stands up a 1000 strong fleet to fly the US routes, great. It will still be Americans doing the work.

If you honestly believe Great Britain is going to export its skilled workforce here, or that we'd grant work visas to allow an entire US domestic operation of 50 or so thousand bodies in you are crazy.

American this, Chinese that, if its not Earl Grey its not British tea, its all bullshit. We're all human beings who require work for sustenance and desire work to fund pleasure. The quicker we stop bitching about who gets what and we don't care if we don't get it as long as you don't either is the way of the cavemen.

Economics does not have a branch of research dedicated to children's games.

If people want to fly from East Jesus, South Dakota, they should be prepared to pay what it costs. Otherwise they shouldn't live there and its not my job to make sure that them living there is affordable. If Delta cannot afford to fly there, they shouldn't.

We argued that without AT&T, people in West Pitchfork, Idaho would never get service. Here were are, and I'll be damned if they don't still have phone service. Competitively offered! Not even a party line! Satellite, radio, fixed cellular, traditional PSTN, hell VOIP over their shiny 21st century ground station. None of this shit would exist if we hadn't broken up AT&T and made everyone innovate. Service quality improved 10fold in 5 years post the breakup of the bells. And now that market forces are colliding, less regulation is seeming prudent again to foster further concepts in competitiveness.

If protectionism is the answer to keeping a business running, it isn't meant to run. That's it. They are producing a product either nobody wants or its so cheap they can't pass it up. If it weren't there, people could focus on building the product that IS desirable.

Free market, its bitch cause it cuts both ways don't it? You want the EU to be one sovereignty when we want to fly within it, you want the individual countries to be a sovereignty so we can fly within THAT. But when they want exactly the same, then no.

Life is about choices in America. We can make a lot (certainly we aren't "free", but reasonably so and certainly moreso overall than any other humans) of choices. I choose to live in a big city, with ample roadway, services, and air connectivity because those things are important to me. I decided how much it cost to live there, my rent, car insurance, food budgeting, entertainment, etc. I established that I could do it, so I do. If I sat down and evaluated the same thing about Fargo, ND, I might find that the cost of visiting the globe would far outweigh the other benefits. I wouldn't move there. I couldn't afford my life there including the cost of airfare. That is a choice I would have to make.

Lets talk about the choices forced on me, instead. Since there is an outcry for air service to cities with no economic impact to the country, much less the world, Congress pushes our free independant corporations to fly there. They offer this, that, the threaten this, that. The bottom line is, now because someone wants to live in Kileen, TX, Delta and American raise their rates globally to accommodate that. That isn't my choice.

Honestly, I do not care if small cities get served. People are responsible for their own choices. Just because it sounds high and mighty when you're talking about planned pregnancy, doesn't mean it isn't the same when you talk about moving to the suburbs to get away from your fellow Americans.

NS
 
Indy
Posts: 4934
Joined: Thu Jan 20, 2005 1:37 pm

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

Fri Dec 07, 2007 9:40 pm



Quoting Commavia (Reply 113):

But they might want to fly to Atlanta, Austin, Baltimore, Boston, Charlotte, Cincinnati, Cleveland, Dallas, Denver, Detroit, Fort Lauderdale, Hartford, Houston, Kansas City, Las Vegas, Miami, Minneapolis, Nashville, Oakland, Ontario, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Raleigh/Durham, St. Louis, Salt Lake City, San Antonio, San Diego, San Francisco, San Jose, Seattle, Tampa, and/or Washington/Dulles - among others - all of which are large-to-massive U.S. markets with no slot controls or little capacity restriction.

Even if they wanted to fly to these locations is there really room for growth at LHR? That is a lot of extra equipment as well. Plus why fly to some place new and original when you can just serve the same places everyone else does and deplete each others yields.

But forgetting the yields or equipment you still need the slots at LHR.
Indy = Indianapolis and not Independence Air
 
avek00
Posts: 3254
Joined: Mon Oct 25, 2004 5:56 am

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

Fri Dec 07, 2007 10:31 pm



Quoting Tonystan (Reply 81):
UK carriers along with other non-US airlines deserve to be allowed play on an "equal" field with the US carriers by operating domestic services in the US. They should also be allowed to buy into US carriers and create a true Global Economy instead of letting America hold the rest of the world back.

H**l no on both counts.

1. The intorduction of foreign carriers would almost invariably prove net negative to US air consumers. Why? The foreign carriers will do what new entrants typically do -- cherry-pick the most lucrative markets. Sure, BA/AF/LH/VS would run the latest and greatest on routes between EWR/JFK/IAD/ORD/DEN/DFW/IAH/SFO/LAX/SFO/LAS/MCO/TPA/MIA/ATL/PHL/CLT/SEA, and to be sure, that would force the USA legacies into a financial bloodbath. What the Euros will NOT do is offer service with said aircraft into midsize and smaller air markets, which only make sense to serve to/from a large USA domestic hub with proper equipment and the like.

2. The second half of your statement is laughable, with no disrespect intended, because the Americans wouldn't be the biggest loser if cross-border mergers were permitted. European airline labor would effectively go extinct, as European legacy airline workers, as a collective, gripe too much, are too inflexible, and get paid 30% more than their US legacy airline counterparts. An economy should only be global until it hits the wallet at home, right?
Live life to the fullest.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Sat Dec 08, 2007 12:29 am



Quoting DLPMMM (Reply 130):

Quoting Jacobin777 (Reply 129):
for the record, I'm "open" for Open Skies (no pun intended). If CO or DL wants to fly JFK-LHR-BAH and can get the slots to do so, then it should very well be able to. Just like I believe if VS wants to fly LHR-JFK-HNL it should have a right to do so also

You are comparing 5th freedom rights (JFK-LHR-BAH) and cabotage (LHR-JFK-HNL).

...no need to be pedantic... I could easily use LHR-JFK-YYZ/YVR or LHR-JFK-EZE as an example.....the argument is basically the same..

Quoting DLPMMM (Reply 130):

Quoting Jacobin777 (Reply 129):
"Although U.S. airlines will be allowed to fly within Europe under open skies, European airlines won't be allowed to do the same here. So, for example, American Airlines could fly from New York to London, then pick up additional passengers and shuttle them to Berlin, but Virgin couldn't go from London to New York and then on to Chicago with new passengers."**

Not that any USA carrier would want to waste a valuable LHR slot pair in flying to Berlin. The EU can keep those rights to intra-EU flights for all the USA cares.

....again, as I stated above, its not the EC's problem what a carrier does with LHR slots or how its meant to compete with European LCC's or legacies....

Quoting DLPMMM (Reply 130):
Quoting Jacobin777 (Reply 129):
At the end of the day, the Open Skies deal was struck on the basis of further negotiations with the U.S. Government giving EC carriers more liberal rights within the United States with the possibility of the EC revoking LHR-rights if a deal wasn't finalised by "x"-amount of time.

Promising further negotiations does not mean promising to capitulate. This was just a face saving clause for the EU negotiators. Everyone knows that the negotiations will go nowhere.

If the EC wants to revoke LHR rights, no problem. I think that the revocation of rights for EC airlines to fly to the USA from LHR would be a proportionate response.

...of course it doesn't mean promising to capitulate...and why a "face-saving" clause?...the retraction of the deal/policy for LHR is very plausible...which will bring it back to the current situation..no LHR rights for CO, DL, etc....

Quoting DLPMMM (Reply 130):

The USA said it will negotiate, not concede.

....who said about conceding? the USofA signed a deal knowing full well if they don't complete the 2nd part of the deal/policy there is a chance of the British Government rescinding their LHR policy....."a deal is a deal"...

Quoting DLPMMM (Reply 130):
It would also be within the USA's rights to impose actions in kind.

.....as if trade restrictions have ever helped.. sarcastic ..not to mention, I'm sure the AA's, DL's and CO's of the world wouldn't be all to enthralled if the EC decides to impose some actions on them either... no 
"Up the Irons!"
 
Viscount724
Posts: 19316
Joined: Thu Oct 12, 2006 7:32 pm

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

Sat Dec 08, 2007 12:59 am

Quoting Jacobin777 (Reply 136):
...no need to be pedantic... I could easily use LHR-JFK-YYZ/YVR or LHR-JFK-EZE as an example.....the argument is basically the same..

BA already has 5th freedom rights JFK-YYZ. They operated that sector for a couple of years in the 1990s as part of their YYZ-JFK-BHX route using 757s.

[Edited 2007-12-07 17:00:59]
 
Trvlr
Posts: 4251
Joined: Thu Feb 17, 2000 9:58 am

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

Sat Dec 08, 2007 1:42 am



Quoting Jacobin777 (Reply 136):
.....as if trade restrictions have ever helped.. ..not to mention, I'm sure the AA's, DL's and CO's of the world wouldn't be all to enthralled if the EC decides to impose some actions on them either...

Like what? The ability to fly between Brussels and Rome? Let them retaliate, US carriers could care less...
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Sat Dec 08, 2007 1:56 am



Quoting Jacobin777 (Reply 136):
...no need to be pedantic... I could easily use LHR-JFK-YYZ/YVR or LHR-JFK-EZE as an example.....the argument is basically the same..

It is not the same because EU airlines have the right to fly LHR-JFK-YYZ or EZE as 5th freedoms now. That is entirely different than cabotage.

Quoting Jacobin777 (Reply 136):
...of course it doesn't mean promising to capitulate...and why a "face-saving" clause?...the retraction of the deal/policy for LHR is very plausible...which will bring it back to the current situation..no LHR rights for CO, DL, etc....

The face saving is on the EU side. Read my reply 64 above. No sense in repeating the same things over and over.

The current situation cannot and will not be brought back, as Bermuda II was declared illegal by the EU courts. Once again, please read reply 64. If the UK rescinds LHR rights for USA carriers (which they will not), the USA would just respond in kind by rescinding all flights to the USA from LHR or some similar proportionate response. I repeat, the UK will not rescind LHR rights for USA airlines. The UK government has never even stated it as an option.

Quoting Jacobin777 (Reply 136):
....who said about conceding? the USofA signed a deal knowing full well if they don't complete the 2nd part of the deal/policy there is a chance of the British Government rescinding their LHR policy....."a deal is a deal"...

And the UK knows full well that it would probably bankrupt 2 of their 3 flag carriers, and so will not do such a thing. There is a chance that monkeys might fly out of my butt too, but I wouldn't want to take the odds on it. The UK would be cutting off it's nose....

Quoting Jacobin777 (Reply 136):
.....as if trade restrictions have ever helped.. ..not to mention, I'm sure the AA's, DL's and CO's of the world wouldn't be all to enthralled if the EC decides to impose some actions on them either...

You are the one proposing that if the EU does not get cabotage within the USA and the foreign ownership restriction lifted, that the UK or EC will start a trade war. I'm telling you that nothing is going to change for the foreseeable future. The US congress will not change the ownership laws, and cabotage will not be allowed. There will be no trade war, and the EC negotiators do not expect any new ASA negotiations to go anywhere for the foreseeable future. It is VA that is making the stink here, not the UK or EC governments. VA is scared because they have little to no feed at either end.

These "trade war" threats are the same clap-trap that some around here were spouting shortly after the EU courts declared the bilateral agreements void and the Air Services Agreement talks between the EC and USA broke down.

I predicted the exact terms of the resultant agreement (minus the time table) back then. Some propounding the same sorts of arguments were predicting the EU would start a trade war over these same issues. The logical process of the trade war prognosticators was flawed then, and is still flawed in the same way.
 
DTWAGENT
Posts: 753
Joined: Tue Jan 10, 2006 1:16 am

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

Sat Dec 08, 2007 1:58 am

Why can't both sides of the pond grow up and act like adults. Besides I thought the Brits wanted this open skies agreement?

Chuck
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Sat Dec 08, 2007 2:19 am



Quoting DTWAGENT (Reply 140):
Why can't both sides of the pond grow up and act like adults. Besides I thought the Brits wanted this open skies agreement?

In this case, the governments are acting like adults.

BA is reportedly looking forward to the new open skies arrangement and flying from the continent.

VA is trying to stir the pot because they feel threatened by the new competitive landscape.

Some on this board are also stirring madly. Why? I don't know.

The governments themselves really haven't said a peep.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Sat Dec 08, 2007 3:24 am



Quoting DLPMMM (Reply 139):
No sense in repeating the same things over and over.

..seems as if I've been doing the same thing ad nauseam

Quoting Trvlr (Reply 138):

Quoting Jacobin777 (Reply 136):
.....as if trade restrictions have ever helped.. ..not to mention, I'm sure the AA's, DL's and CO's of the world wouldn't be all to enthralled if the EC decides to impose some actions on them either...

Like what? The ability to fly between Brussels and Rome? Let them retaliate, US carriers could care less...

....that's not what I was referring to....

Quoting Viscount724 (Reply 137):
Quoting Jacobin777 (Reply 136):
...no need to be pedantic... I could easily use LHR-JFK-YYZ/YVR or LHR-JFK-EZE as an example.....the argument is basically the same..

BA already has 5th freedom rights JFK-YYZ. They operated that sector for a couple of years in the 1990s as part of their YYZ-JFK-BHX route using 757s.

....you are correct, I did forget about that....so that kind of takes part of my argument...regardless, if USofA carriers want to fly TXL-HAM, they should be able to (just as I stated carriers should be able to fly to LHR as much as they want if they are willing to get the slots)...also, given the geography of Europe versus that of United States, connecting say ORD-JFK would be basically the same as GLA-FRA (in terms of distance)..and since the EC is considered as "one territory" (my phrase for a lack of a better name), or should I say, "Single Market" as the European Court of Justice puts it , flying GLA-FRA is effectively cabotage....

Quoting DLPMMM (Reply 139):

The current situation cannot and will not be brought back, as Bermuda II was declared illegal by the EU courts.

....if you read the Court Ruling, AFAIK, it was illegal not for allowing the CO's and DL's of the world to fly to LHR, but rather for European Member States carriers to fly from LHR to the United States...it was deemed illegal because an EC-based company has the right to setup business in the United Kingdom and conduct its business from there to other countries, which includes the United States without discrimination........this is what the European Court of Justice found illegal. The lawsuit was also brought up against Denmark, Sweden, Finland, Belgium, Luxembourg, Austria and Germany.

....the United States was not internecine to this particular debate...

Theoretically, if the the United Kingdom Govt. wants, it can prevent the DL's and CO's of the world from flying into LHR while allowing the AF's and KL's of the world to fly from LHR to the USofA....

Quoting DLPMMM (Reply 139):
If the UK rescinds LHR rights for USA carriers (which they will not), the USA would just respond in kind by rescinding all flights to the USA from LHR or some similar proportionate response.

..........a deal was made which gives the UK Govt. the right to do it..the USofA govt. signed it....it knows what a possible outcome is....

Quoting DLPMMM (Reply 139):
I repeat, the UK will not rescind LHR rights for USA airlines. The UK government has never even stated it as an option.

..ey?  confused 

from the article (thread starter)

"There will be a withdrawal of rights [at Heathrow] if it all goes up in smoke. That is what the [UK] Government has said."

Quoting DLPMMM (Reply 139):
You are the one proposing that if the EU does not get cabotage within the USA and the foreign ownership restriction lifted, that the UK or EC will start a trade war.

... whistleblower ...where did I state that?  confused .....

Quoting DLPMMM (Reply 139):
VA is scared because they have little to no feed at either end.

.....while certain conditions are in places such as..

"DOT is also requiring changes to Virgin America's licensing deal with the Virgin Group. Virgin America told DOT that nothing in the license agreement prohibits the carrier from flying outside the Virgin Group brand as long as it doesn't use the Virgin Group trademark and continues to pay royalties in full. DOT countered that there's no reason why Virgin America's operations independent from the Virgin Group should be subject to royalties. "Payment of 'royalties' on revenues not derived from use of the brand name would undermine the applicant's independence," according to DOT."*

*-aviationweek.com

while in theory VX has the right to basically "remove itself" from the Virgin Group, I doubt it will and it certainly doesn't mean VX and VS couldn't code-share for flights if they wanted to.... no 
"Up the Irons!"
 
avek00
Posts: 3254
Joined: Mon Oct 25, 2004 5:56 am

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

Sat Dec 08, 2007 2:04 pm



Quoting DTWAGENT (Reply 140):
Why can't both sides of the pond grow up and act like adults.

Good adults seek to reasonably defend their interests.
Live life to the fullest.
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Sat Dec 08, 2007 7:39 pm



Quoting Jacobin777 (Reply 142):
regardless, if USofA carriers want to fly TXL-HAM, they should be able to (just as I stated carriers should be able to fly to LHR as much as they want if they are willing to get the slots)..

The point is that USA carriers do not want to fly TXL-HAM.

Quoting Jacobin777 (Reply 142):
also, given the geography of Europe versus that of United States, connecting say ORD-JFK would be basically the same as GLA-FRA (in terms of distance)..and since the EC is considered as "one territory" (my phrase for a lack of a better name), or should I say, "Single Market" as the European Court of Justice puts it , flying GLA-FRA is effectively cabotage....

USA carriers also do not want to fly GLA-FRA.

The USA carriers have no interest in flying "cabotage" within the EU, especially since most all the major airports in the EU are slot restricted.

That is the point! There is nothing to gain for the USA to agree to reciprocal cabotage with the EC. All that will happen is the EU airlines will fill in their TATL schedules by cherry-picking the high yielding trunk routes with their wide-bodied aircraft. The USA airlines could not do the same in the EC because of the slot restrictions.

What about this do you not understand?

Quoting Jacobin777 (Reply 142):
Theoretically, if the the United Kingdom Govt. wants, it can prevent the DL's and CO's of the world from flying into LHR while allowing the AF's and KL's of the world to fly from LHR to the USofA....

So what? Theoretically, if the USA Gov't wants, the USA could respond by preventing all aircraft originating at LHR from landing in the USA. BFD. We can all make hypothetical cases.

Quoting Jacobin777 (Reply 142):
"There will be a withdrawal of rights [at Heathrow] if it all goes up in smoke. That is what the [UK] Government has said."

That was a quote from the VA chief, not the UK government. If you actually read the rest of the article, all the others quoted, including the aviation analysts and the US government representative, give little chance for any second tier agreement being reached.

Quoting Jacobin777 (Reply 142):
... ...where did I state that? .....

Repeatedly when you say things like this:

Quoting Jacobin777 (Reply 142):
Theoretically, if the the United Kingdom Govt. wants, it can prevent the DL's and CO's of the world from flying into LHR while allowing the AF's and KL's of the world to fly from LHR to the USofA....



Quoting Jacobin777 (Reply 136):
.....as if trade restrictions have ever helped.. ..not to mention, I'm sure the AA's, DL's and CO's of the world wouldn't be all to enthralled if the EC decides to impose some actions on them either...



Quoting Jacobin777 (Reply 129):
then the British Government certainly has a right to protest as well as implement its pre-Open Skies restrictions...

As to why VA is scared.

Quoting Jacobin777 (Reply 142):
while in theory VX has the right to basically "remove itself" from the Virgin Group, I doubt it will and it certainly doesn't mean VX and VS couldn't code-share for flights if they wanted to....

Never said they couldn't code share. As I said before, VA is scared because they have little to no feed on either end of their routes. A few transcon flights to JFK and maybe IAD constitutes "little to no" feed.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Sat Dec 08, 2007 9:35 pm



Quoting DLPMMM (Reply 144):
The point is that USA carriers do not want to fly TXL-HAM.

..not the EC's problem...

Quoting DLPMMM (Reply 144):
USA carriers also do not want to fly GLA-FRA.

..not the EC's problem again....

Quoting DLPMMM (Reply 144):
That is the point! There is nothing to gain for the USA to agree to reciprocal cabotage with the EC. All that will happen is the EU airlines will fill in their TATL schedules by cherry-picking the high yielding trunk routes with their wide-bodied aircraft. The USA airlines could not do the same in the EC because of the slot restrictions.

....if its nothing for the USofA to gain then why should the EC (particularly the UK) open up if it believes it doesn't have as much to gain either?

Quoting DLPMMM (Reply 144):
So what? Theoretically, if the USA Gov't wants, the USA could respond by preventing all aircraft originating at LHR from landing in the USA. BFD. We can all make hypothetical cases.

..my point is more practical....

Quoting DLPMMM (Reply 144):
Repeatedly when you say things like this:

Quoting Jacobin777 (Reply 142):
Theoretically, if the the United Kingdom Govt. wants, it can prevent the DL's and CO's of the world from flying into LHR while allowing the AF's and KL's of the world to fly from LHR to the USofA....

....the withdrawal would still allow US carriers to fly to LHR......which is still more than enough competition for the BA's and VS's of the world....

Quoting DLPMMM (Reply 144):
If you actually read the rest of the article, all the others quoted, including the aviation analysts and the US government representative, give little chance for any second tier agreement being reached.

...


..really?..I only read a few sentences of the article (so he says in a sardonic manner)..its obvious that might not happen..the whole point of this discussion is what could possibly happen if the 2nd part of the agreement isn't done....
"Up the Irons!"
 
Viscount724
Posts: 19316
Joined: Thu Oct 12, 2006 7:32 pm

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

Sat Dec 08, 2007 10:28 pm



Quoting DLPMMM (Reply 144):
Quoting Jacobin777 (Reply 142):
regardless, if USofA carriers want to fly TXL-HAM, they should be able to (just as I stated carriers should be able to fly to LHR as much as they want if they are willing to get the slots)..

The point is that USA carriers do not want to fly TXL-HAM.

Even German carriers don't want to fly TXL-HAM. There hasn't been any air service between Hamburg and Berlin for a few years since fast trains were introduced.
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Sat Dec 08, 2007 10:44 pm



Quoting Jacobin777 (Reply 145):
....if its nothing for the USofA to gain then why should the EC (particularly the UK) open up if it believes it doesn't have as much to gain either?

You stated the reason yourself earlier. The EC was asking for the USA to open up LHR-USA access to all the EC carriers, not just the UK carriers. This was required by the EC courts. The USA agreed so long as LHR was opened up for all USA carriers as well. A fair trade for both sides.

5th Freedom rights were incorporated as well. Also fair for both sides.

The EC wanted the USA to match it's 49% ownership rule. The USA's congress is unwilling to change the laws, so the issue was a non-starter.

The EC wanted (allegedly) cabotage. The USA said no way.

The USA was happy with the status quo.

I really don't think the USA would care much if everything went back to Bermuda II and the individual bilaterals.

Quoting Jacobin777 (Reply 145):
Quoting DLPMMM (Reply 144):
So what? Theoretically, if the USA Gov't wants, the USA could respond by preventing all aircraft originating at LHR from landing in the USA. BFD. We can all make hypothetical cases.

..my point is more practical....

Sure  Yeah sure Very practical if the UK government wants to start an aviation trade was that would likely bankrupt both BA and VA.

What is the percentage of BA and VA revenue derived from LHR-USA?

Quoting Jacobin777 (Reply 145):
..the whole point of this discussion is what could possibly happen if the 2nd part of the agreement isn't done....

Your point might have been to fantisize about what could theoretically happen in a parallel universe.

My point was that it is all really settled and this was just VA whining and trying to stir the pot. There will be no second part, and there is not much that the UK or the EC can do about it. They were aware of it from the start, and that is why they made the agreement they did.

The future negotiations clause had to be included to keep the EC negotiators from looking stupid.

Go back and look at the inflammitory public comments by the EC negotiators of how cabotage and ownership restriction position held by the USA were the negotiating stumbling blocks. In reality, the stumbling block was that the UK and other EC nations had not agreed on their own position. They could not come out and state that the reason for no agreement with the USA was that the EC did not know what to negotiate for, so they used cabotage and ownership as strawmen stumbling block issues until they could work out their own internal negotiating position.

Here is a link that might help add some perspective:

http://www.state.gov/e/eeb/rls/rm/34327.htm
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Sun Dec 09, 2007 12:15 am



Quoting Viscount724 (Reply 146):
Quoting DLPMMM (Reply 144):
Quoting Jacobin777 (Reply 142):
regardless, if USofA carriers want to fly TXL-HAM, they should be able to (just as I stated carriers should be able to fly to LHR as much as they want if they are willing to get the slots)..

The point is that USA carriers do not want to fly TXL-HAM.

Even German carriers don't want to fly TXL-HAM. There hasn't been any air service between Hamburg and Berlin for a few years since fast trains were introduced.

..that's not the point...

Quoting DLPMMM (Reply 147):
The EC was asking for the USA to open up LHR-USA access to all the EC carriers, not just the UK carriers. This was required by the EC courts. The USA agreed so long as LHR was opened up for all USA carriers as well. A fair trade for both sides.

....a fair trade according to you? Not according to some in the EU...

"I appreciate-indeed, I share-the deep disappointment that many in Europe felt when the rulemaking (about ownership laws) was ended."*

John R. Byerly, Deputy Assistant Secretary for Transportation Affairs

The EC was only interested in allowing EU-based carriers to fly LHR-USofA...nothing about additional USofA carriers flying into LHR...

Quoting DLPMMM (Reply 147):
The EC wanted the USA to match it's 49% ownership rule. The USA's congress is unwilling to change the laws, so the issue was a non-starter.

..no kidding.......I wonder why the EC was disappointed...

Quoting DLPMMM (Reply 147):

The EC wanted (allegedly) cabotage. The USA said no way.

I wonder why the EC was disappointed...

Quoting DLPMMM (Reply 147):
The USA was happy with the status quo.

I wonder why the EC was disappointed...

Quoting DLPMMM (Reply 147):

I really don't think the USA would care much if everything went back to Bermuda II and the individual bilaterals.

..so what's the problem then? Why have the DL's and CO's of the world access LHR? Why should they? How about having the AF's and the LH's of the world having the possibility of serving USofA from LHR (which would actually fulfill the EC Court's ruling)....

Quoting DLPMMM (Reply 147):
Sure Yeah sure Very practical if the UK government wants to start an aviation trade was that would likely bankrupt both BA and VA.

....how would it bankrupt both BA and VA ? Also, given that the UK allows reciprocity of two USofA-based carriers to fly to LH, why would a so-called "trade war" loom?

Quoting DLPMMM (Reply 147):

Your point might have been to fantisize about what could theoretically happen in a parallel universe.

...sure, whatever you say.. sarcastic 
"Up the Irons!"
 
DLPMMM
Posts: 2281
Joined: Wed Apr 20, 2005 12:34 am

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

Sun Dec 09, 2007 1:11 am



Quoting Jacobin777 (Reply 148):
The EC was only interested in allowing EU-based carriers to fly LHR-USofA...nothing about additional USofA carriers flying into LHR...

That was the trade. If all the EC carriers were going to get rights to fly to the USA from LHR, then all the USA carriers were going to get rights to fly USA-LHR.

Quoting Jacobin777 (Reply 148):
"I appreciate-indeed, I share-the deep disappointment that many in Europe felt when the rulemaking (about ownership laws) was ended."*

John R. Byerly, Deputy Assistant Secretary for Transportation Affairs

Do you really not understand international diplomacy well enough to read between the lines?

Quoting Jacobin777 (Reply 148):
..no kidding.......I wonder why the EC was disappointed...



Quoting Jacobin777 (Reply 148):
I wonder why the EC was disappointed...



Quoting Jacobin777 (Reply 148):
I wonder why the EC was disappointed...

You seem to wonder about alot of things.

I'll say it one more time since you keep ignoring the salient point.

THE EC NEGOTIATORS NEVER EXPECTED TO GET CABOTAGE OR OWNERSHIP LEVEL CHANGES.

I give the EC negotiators credit that they know their jobs. In knowing their jobs, they knew that those issues were not negotiable areas for the USA negotiators. There was no way that those iossues could have ever made it through the USA legislature.

Are you saying the EU negotiators thought they could get cabotage and ownership level changes? I don't think they are that stupid.

They are still not that stupid, which is why you don't hear anything about the second tier negotiations, except from VA.

Quoting Jacobin777 (Reply 148):
..so what's the problem then? Why have the DL's and CO's of the world access LHR? Why should they? How about having the AF's and the LH's of the world having the possibility of serving USofA from LHR (which would actually fulfill the EC Court's ruling)....

The EC's court ruling has nothing to do with the USA as you pointed out. It was an EC problem.

The agreement was that AF and LH (and any other EC airline) could serve the USA from LHR provided that the USA airlines (ie DL/CO/US) could serve LHR from the USA..

Your theoretical "how about" was a non-starter. If the EC wanted LHR access to the USA for all EC airlines, the price was LHR access for all USA carriers as well. It is all very simple.

Quoting Jacobin777 (Reply 148):
....how would it bankrupt both BA and VA ? Also, given that the UK allows reciprocity of two USofA-based carriers to fly to LH, why would a so-called "trade war" loom?

Because Bermuda II is dead and gone now. If the ere to stop USA flight rights to LHR, the USA proportional response would be to stop all USA bound flights from LHR.

Now look at the proportional effect on revenue streams for each affected carrier. Your whole premise is moot though, because the UK has no intention of taking such action.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

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

Sun Dec 09, 2007 3:54 am



Quoting DLPMMM (Reply 149):
Quoting Jacobin777 (Reply 148):
The EC was only interested in allowing EU-based carriers to fly LHR-USofA...nothing about additional USofA carriers flying into LHR...

That was the trade. If all the EC carriers were going to get rights to fly to the USA from LHR, then all the USA carriers were going to get rights to fly USA-LHR.

...

Quoting DLPMMM (Reply 149):

Do you really not understand international diplomacy well enough to read between the lines?

...and you think you are a Mr. "Cognoscenti of International Diplomacy".....even though I continuously present facts which refute/contradict a bunch of your comments....

Quoting DLPMMM (Reply 149):
Quoting Jacobin777 (Reply 148):
..no kidding.......I wonder why the EC was disappointed...



Quoting Jacobin777 (Reply 148):
I wonder why the EC was disappointed...



Quoting Jacobin777 (Reply 148):
I wonder why the EC was disappointed...

You seem to wonder about alot of things.

....what a lame tu quoque....does the word "rhetorical" mean anything to you?

Quoting DLPMMM (Reply 149):
THE EC NEGOTIATORS NEVER EXPECTED TO GET CABOTAGE OR OWNERSHIP LEVEL CHANGES.

1)..stop yelling...
2)what the 'ell are you talking about?


"The European Parliament gives its green light to the EU-US aviation agreement which was signed at the EU-US summit of 30 April 2007 and which the Council endorsed and decided to apply provisionally as from 30 March 2008. The report was adopted with 513 votes in favour, 15 against and 35 abstentions.

The agreement deals with, inter alia
Rights in the area of ownership, investment and control of US airlines by EU investors."**

**-European Union 25 May 2007

..further more...

"1. If no second stage agreement has been reached within 12
months of the start of the review provided in Article 21(3) of
the Agreement, any Member State may, within the following
15 days, notify to the Commission which traffic rights in relation
to its territory, if any, it wishes to suspend."**

**-European Union 25 May 2007

"Mr Alexander also claimed to have won commitments from the Bush administration that US restrictions on ownership of American airlines and on internal flights would be acted upon in a second stage of talks. However, US officials later refused to guarantee that ownership and internal flight restrictions will be dropped. To give those talks extra bite, individual EU governments can remove US airlines' traffic rights within Europe if a deal allowing European airlines to win majority control of American rivals - and operate within the US - is not won by the end of 2010."***

"John Byerly, the lead US negotiator, said he expected US approval of the five month hiatus but stopped short of pledging changes in ownership and internal flight rules. "We're going to work in absolute good faith and constructively on a second-stage agreement, to build on what we've accomplished thus far," he said."***

***-guardian.co.uk

...would you care to explain what that means then???

Quoting DLPMMM (Reply 149):

Quoting Jacobin777 (Reply 148):
....how would it bankrupt both BA and VA ? Also, given that the UK allows reciprocity of two USofA-based carriers to fly to LH, why would a so-called "trade war" loom?

Because Bermuda II is dead and gone now. If the ere to stop USA flight rights to LHR, the USA proportional response would be to stop all USA bound flights from LHR.

....your so-called "proportional response" would bring things back to the status quo..nothing more and nothing less..only AA/UA/BA/VS would be allowed to fly USofA-LHR...
"Up the Irons!"

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