New start on open skies

OPEN skies talks between the UK and US aimed at liberalising transatlantic air travel will resume next month after ending abruptly in October, when the US delegation stormed out claiming insufficient progress was being made.

"There are going to be informal exploratory discussions in the middle of February," a Department of Transport spokesman said on Friday.

Airlines on both sides of the Atlantic publicly support the idea of an open skies agreement that would allow UK air carriers to fly more freely in the US, and US operators to fly more freely into Heathrow and from Heathrow to other European destinations.

"We believe it vitally important for the two sides to resume talking," declared a British Airways spokesman. "We have long been an exponent of an open skies air pact between the two nations."

Beneath the surface, however, there is mounting frustration and mistrust on all sides of the multi-faceted talks. A BA/American Airlines business alliance, which might be one of the fruits of an open skies agreement, remains bogged down three years after it was first proposed. Rivals to BA and AA on both sides of the Atlantic fret that the alliance would shut them out of the lucrative transatlantic air route.

"I think BA is facing a softening economy, its stock is way down, and it realises that a large part of its profits come from its hold on Heathrow," said Steven Wolf, chairman of US Airways. "I think they are less inclined to give that up now."

Testing the tone of the February discussions, US Airways plans this month to press its case for slots at Gatwick, allowing it to fly between the UK and Charlotte, North Carolina.

"The Brits pooh-pooh this," said a US government official. "But it's serious. North Carolina is the home of Senator Jesse Helms. Jesse is chairman of the Senate Foreign Relations Committee. The Senate Foreign Relations Committee oversees the State Department, which is leading the US side of the open skies talks."

Beyond the details, both sides wonder if there is a basis for an agreement in the first place. The US has signed bi-lateral open skies agreements with 32 nations. It is pressing to make the UK number 33. But the UK argues that it has the second-most dynamic airline industry in the world after the US, and so should not be forced to make the concessions to Washington that US negotiators have winkled out of other governments.

UK and US negotiators are now talking about a phasing-in of an open skies agreement. This would mean the UK opening Heathrow slots to US air carriers on a graduated basis, as the US allowed UK carriers to select routes it could fly internally in the US.

At the end of this process, US air carriers might have what they want - access to Heathrow and the right to fly on from Heathrow to Paris, Amsterdam, Frankfurt and other destinations like British and European airlines.

UK air carriers might have what they want. BA wants the US Justice Department to grant its alliance with American Airlines immunity from US anti-trust legislation. This would allow BA and AA to share customers and costs.

Virgin wants the right to buy or build its own airline in the US. Currently, US law restricts foreign ownership of US airlines to 25 per cent, although the Clinton administration has publicly called for this limit to be lifted to 49 per cent.

The problem is, the talks are so complex that whenever a concession is granted to one party in one aspect of the talks, it offends another party in another aspect of the talks.

Meanwhile, British officials see American price-cutting on air routes as predatory. US officials see the UK opposition to cut-rate air fares as restrictive.

"Not soon," said one airline official when asked when air travellers might expect a new, deregulated transatlantic regime to materialise.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions