Complains of US Aviation Proposal
May 2004, 17:50 UTC
The European Union is complaining that a U.S. proposal falls far short of its
desire to establish an open trans-Atlantic aviation area. The U.S. offer was
an attempt to break the deadlock in negotiations aimed at liberalizing air transportation
between the United States and Europe. U.S. officials say the EU wants too much,
and that even the European airline industry is divided over the issue.
The European Union wants to
rescind the web of bilateral agreements that govern trans-Atlantic
air traffic, and replace them with an overall accord between
the United States and the European Union. Flights across
the Atlantic account for more than one half of the world's
total air traffic.
EU Transportation Commissioner
Loyola de Palacio says the Union's goal in the on-again,
off-again negotiations is to redesign the relations between
Europe and the United States in the aviation field.
"What we must be capable to
build is a common trans-Atlantic aviation area, with a totally
integrated aviation market, with common standards and security
and safety," she said.
The European Union wants the
United States to allow Europeans to buy a majority share
in U.S. airlines. U.S. law currently mandates that foreigners
can only own up to 25 percent of an American carrier. The
Europeans also want the right for their airlines to carry
cargo and passengers between U.S. cities, a practice that
is not allowed in current agreements.
The Bush administration's proposal
would allow foreigners to own up to 49 percent of an American
airline, subject to approval from the U.S. Congress. But
the administration is not willing to raise the limit further.
U.S. officials say the issue
of carrying passengers and cargo inside the United States
should be resolved in the future. One U.S. diplomat says,
such a move would be too politically sensitive in an election
year, because it would upset the U.S. airline industry and
its influential labor unions. He also argues that it would
require changes to U.S. law.
Commissioner de Palacio says
more competition between U.S. and European airlines on both
domestic and international routes would reduce prices for
"We in Europe, we are ready
to open our market to competition, to integrate it into the
American one," said Mr. Palacio. "And I think that America,
which has always been leading in competitiveness, free market
and the best for consumers, in this case, I can't understand
why they don't follow us."
The U.S. proposal would also
allow European airlines to set themselves up as tour operators
and freight forwarders in the U.S. market, using American
planes to provide their services. But the Europeans say that
is not much different from the way they operate now.
Ms. Palacio has to recommend
to EU transportation ministers in 10 days whether to accept
the U.S. offer as it stands. Some European airlines, like
Spain's Iberia and Ireland's Aer Lingus argue for acceptance
of the offer, because it would give them the right to fly
to more U.S. cities. Others, like British Airways, Air France
and Lufthansa, Europe's 'Big Three,' say the U.S. offer has
little commercial value, and they are calling for its rejection.