Wed, Sep 13, 2006
US, EU Pact Opposed By Congress, Labor Unions
An "open-skies" deal
between the US and the EU, a decade in negotiations and in limbo
since written last November, still faces serious opposition. Labor
unions and some airlines object to an administration-requested
change in current rules that the deal's opposition says will allow
foreign ownership in US airlines.
The Bush administration wants to change the rules restricting
foreign investment and management of US air carriers because, they
say, the EU won't agree to the proposed open-skies pact
otherwise.
The DOT's Undersecretary for Policy Jeff Shane spoke at the
International Aviation Club in Washington saying "If we lose the
current open-skies agreements, we face the very real prospect of
dismantling the US-EU airline alliance structure that provides so
much international aviation competition today, as well as the
emerging cross-border airline mergers."
According to a Financial Times report, the 60-year-old rules --
the Warsaw Convention -- that govern international relationships
between airlines require that carriers be "effectively owned and
controlled" by citizens of the state in which they are based. But a
European Court of Justice ruled that contravenes EU law.
EU member states say the "nationality clause" worked when the
Warsaw Convention was enacted, but became obsolete when the EU was
formed. They say there will be "massive disruption" if hundreds of
agreements have to be renegotiated should the open-skies agreement
fall apart.
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