EU-US Open skies agreement

[Colonâ„¢]

Wow, I hadn't really expect a breakthrough on this. About time though. Good to see the EU still can get some things done.

http://news.bbc.co.uk/1/hi/business/4451440.stm

EU-US land 'open skies' agreement
Passenger jets

The breakthrough "open skies" deal follows years of talks aimed at liberalising air services between the US and Europe.

The deal still requires the approval by the US and the 25 EU member states.

Currently, flights between the US and EU are restricted by a number of bilateral deals that have been negotiated by individual governments.

Fundamental changes ahead

Under Friday's deal, US airlines will be free to fly both to airports in the European Union and from there to third destinations.

Similarly, European airlines will be able to fly to US airports and from there to other destinations.

An open skies agreement could see major changes to trans-Atlantic services from London's Heathrow airport, with the US keen to secure wider access for its carriers.

Experts say full liberalisation between the EU and US could transform the industry, leading to mergers between airlines.

However, Friday's deal falls short of opening up for total foreign ownership of US airlines.

[mrmitchell]

Good. As long as we're on the subject, are European airlines in as much financial trouble as American ones always are? It seems as if every other week there's a layoff or bankruptcy in some large airline, but by some miracle presumably involving lots of lawyers, the names always stay the same, and more importantly, the planes stay in the air. (Although I really liked the Onion's peice about Delta cancelling a flight in mid-air. )

If there is any foreign industry that is as continually in the crapper as American airlines are, I would be surprised.

[Ted Striker]

Some of the older airlines are the equivalent of GM

Good to see some competition injected into the airline industry, which has been stagnant in terms of innovation for the past 20 years straight.

[Colonâ„¢]

Originally posted by mrmitchell
Good. As long as we're on the subject, are European airlines in as much financial trouble as American ones always are? It seems as if every other week there's a layoff or bankruptcy in some large airline, but by some miracle presumably involving lots of lawyers, the names always stay the same, and more importantly, the planes stay in the air. (Although I really liked the Onion's peice about Delta cancelling a flight in mid-air. )

If there is any foreign industry that is as continually in the crapper as American airlines are, I would be surprised.

The European airline industry is generally in good shape, the major exception being the formerly national Italian airlines.

[Colonâ„¢]

Especially the prospect of low-cost transatlantic routes should be interesting.

[Winston]

Originally posted by Colon
The European airline industry is generally in good shape, the major exception being the formerly national Italian airlines.

How about Swissair - and Sabena a few years back. And there seems to be the same amount of ongoing reports of budget worries for many of the major companies as mrmitchell described. Yes, I think we have our share of trouble for the airline industry.

[CerberusIV]

This still has to be approved by all the EU states so it could yet come off the rails.

Ireland will approve it (the government claim to have achieved reasonable concessions in the deal) but there is a lot of complaining about the economic impact on the west of the country around Shannon airport.

At present half the transatlantic flights from the US have to stop over at Shannon (great for all the US owned businesses in the economic zone nearby) but this will fall to only a quarter for the next couple of years then there will be no restriction at all. The worry is that it will mean less US investment in the west of Ireland in the medium term.

It is all very well saying it will create more competition but no agreement can create more flight slots at existing airports that are operating at capacity so it means smaller airports will get busier and new airports be developed. That's a good idea in some ways but not others (particularly if you live under the flightpath or consider the effects of aircraft pollution to be significant).

[JohnT]

Originally posted by Ted Striker
Some of the older airlines are the equivalent of GM

Good to see some competition injected into the airline industry, which has been stagnant in terms of innovation for the past 20 years straight.

Possibly one of the more bizarre business-related statements eveh!

Didja ever try booking a flight in 1982, Ted? Did you know that there was an entire industry of people who did nothing but book flights for you, because it was too hard (or flatly disallowed) for private individuals to book their flights?

And what about those rates! Kept flying as a toy for the elite - $1,000+ plane tickets weren't just common, they were the regulated standard. The idea of a cross-country, sub-$500 flight was laughable, impossible, and most likely illegal.

Frequent Flyer miles, another innovation adapted in the "competitionless, innovation-free" past two decades (1981, but close enough: http://frequentflier.com/ffp-005.htm ).

Nowadays you can get a free plane ticket for buying 32 drinks at Wendy's, and I'm being told that, no!, there's not a single bit of competition in the airline industry.

[Colonâ„¢]

I don't think the ratification will be much of a problem.

Originally posted by Winston


How about Swissair - and Sabena a few years back. And there seems to be the same amount of ongoing reports of budget worries for many of the major companies as mrmitchell described. Yes, I think we have our share of trouble for the airline industry.

That was a couple of years ago. Sabena has been restarted as SN Brussels Airlines and is doing surprisingly well (I don't know about the Swiss though). The big 3 (Air France-KLM, Lufthansa and BA) are all recording healthy and growing profits, and are nowhere near bankruptcy. Compared to the American airlines industry (all majors but Southwest having been bankrupt at some point, and still loss-making in overall) the European is doing extremely well at the moment.

[Jonny]

Actually, I don't think American's ever been in bankruptcy, but nonetheless your point is taken: the airline industry over here is in bad shape.


I imagine this new deal will cause a flurry of activity by airlines in opening new transatlantic routes, especially in empty mid-sized city to mid-sized city pairs with smaller aircraft (757 particularly). And service from more US cities to London, now that the old restrictive Bermuda II agreement will be thrown out.

[Colonâ„¢]

Originally posted by Jonny
Actually, I don't think American's ever been in bankruptcy, but nonetheless your point is taken: the airline industry over here is in bad shape.

?

Chapter 11 is a bankruptcy procedure. Most of the major airlines have been in chapter 11 protection and several still are.

[Jonny]

Perhaps I was unclear; I meant American Airlines -- they're the one of the 6 legacies that has never undergone bankruptcy proceedings.

[Odin]

So I'll be seeing British Airways jets at Fargo Hector International Airport now?

[Ted Striker]

Originally posted by JohnT




Possibly one of the more bizarre business-related statements eveh!

Didja ever try booking a flight in 1982, Ted? Did you know that there was an entire industry of people who did nothing but book flights for you, because it was too hard (or flatly disallowed) for private individuals to book their flights?

And what about those rates! Kept flying as a toy for the elite - $1,000+ plane tickets weren't just common, they were the regulated standard. The idea of a cross-country, sub-$500 flight was laughable, impossible, and most likely illegal.

Frequent Flyer miles, another innovation adapted in the "competitionless, innovation-free" past two decades (1981, but close enough: http://frequentflier.com/ffp-005.htm ).

Nowadays you can get a free plane ticket for buying 32 drinks at Wendy's, and I'm being told that, no!, there's not a single bit of competition in the airline industry.

Wow, rates fell and I can book flights over the Internet. That's nice, but not good enough.

Yet the experience of being on a plane has not changed ONE BIT from 1982. Not at all.

Those innovations are baby steps. I'm talking radical change. Most people hate flying and rightly so. It's a crappy experience that has gone on too long the same way and is in need of change.

[Frozzy]

I like flying Cathay Pacific. You ask for a large brandy and they reply "How large sir?"