"US likely to stall on 'open skies' agreement"

[Thorn]

Originally posted by Whoha
Zeppelins are slow, vulnerable, and I think that they were all pretty vulnerable to failure and crashing as well.

Still, a CFC filled airship might have some merit

That's what they want you to think, ITS AN ANTI-ZEPPLIN CONSPIRACY!!!

[Richelieu]

[Dinner]

I'd love to see an open skies agreement since it would lower prices. I do recall that Clinton tried to sign such an agreement for most of his second term but various European governments (normally France and Germany) blocked it. The US did sign such agreements with the UK and Austria in the 1990's but the EU blocked it saying that the EU government, and not member governments, was the only one which could negatiate such deals. Colon seems to be a decade late with his cries of outrage about politicians stalling the agreement.

[Colonâ„¢]

Originally posted by Oerdin
I'd love to see an open skies agreement since it would lower prices. I do recall that Clinton tried to sign such an agreement for most of his second term but various European governments (normally France and Germany) blocked it. The US did sign such agreements with the UK and Austria in the 1990's but the EU blocked it saying that the EU government, and not member governments, was the only one which could negatiate such deals. Colon seems to be a decade late with his cries of outrage about politicians stalling the agreement.

Do you even know why the the Commission claimed the authorithy to negotiate open air agreements? To start with, it's the jurisdiction of the commission to negotiate such deals, like with matters all of trade. Secondly, by dealing with EU states individually the US was able to negiotate from a much stronger position vs the counterpart.
These bilateral deals granted anti-trust immunity to certain airlines, which meant those airlines could pool their flights with their transatlantic "competitors", and also resulted in the situation that while American airlines could fly from EU state to another, European could do no similar thing within the US.
The old situation was a travesty of the principles of free trade and the Commission was justified to break it up and to push for a comprehensive EU-US open skies deal instead.

[Colonâ„¢]

Originally posted by DanS
Our airlines aren't very financially healthy at this time. The gov't is probably trying to stall a couple more years until the industry is in better shape to compete.

I am skeptical about whether it will ever be in a good position to compete, but there you are. For example, Continental filed for bankruptcy in '83, '91, and maybe soon again.

I presume the freeing limits to foreign investment in US airlines is a big bone of contention to the likes of Continental. It's sad that congress is willing to go along with it, it's in the US' own best interests to stop this situation of Japan-style zombie-corporations ASAP.

[Lawrence of Arabia]

proving once again that this administration isnt for the consumer, but only for big business.

[dannubis]

Originally posted by Oerdin
I'd love to see an open skies agreement since it would lower prices. I do recall that Clinton tried to sign such an agreement for most of his second term but various European governments (normally France and Germany) blocked it. The US did sign such agreements with the UK and Austria in the 1990's but the EU blocked it saying that the EU government, and not member governments, was the only one which could negatiate such deals. Colon seems to be a decade late with his cries of outrage about politicians stalling the agreement.

what colon said

The deal Clinton proposed was a rip off for the european airliners

[Dinner]

The fact remains that the US kept pushing for a comprehensive deal with the EU while France and Germany successfully blocked it because they felt their airlines needed time to compete. The US was ready and willing to sign a full agreement. It was only after the EU government proved itself to be completely tied up by France and Germany that the US turned to the member states to sign such agreements. If you really feel like getting mad about not having an open skies agreement then picket your nearest French embassy.

Please can the outrage now that the EU suddenly has changed its mind due to the US industry being in a weak position. It's a game the EU knowns how to play well and now the US is just giving it back to them.

[Adam Smith]

Oerdin
The EU has been stalling for years to protect their own national carriers.

The main sitcking point is that the European Community and most Asian countries are not yet ready to allow US airlines to fly domesitc and international routes witin and between their countries. US negotiators are understandably hesitant to drop barriers to foreign arilines in the US withour gaining access to foreign markets. In fact, most foreign carriers are much less efficient than US airlines, due to years of government ownership and protection, and they have comparatively little sophistication in modern airline marketing strategies. Without subsidies from their home governments, they would not be likely to offer much competition to US airlines.

Source: Severin Borenstein, "The Evolution of US Airline Competition," Journal of Economic Perspectives, Spring, 1992, p. 68.

By the early 1990s, as a result of structural changes in the airline industry, the limits of open market agreements were becoming more apparent. US airline deregulation and the industry consolidation that followed had produced several carriers with large national networks and a strong commercial orientation. These carriers saw greater opportunities for expansion in international markets than within the more mature US domestic market. And in Europe, where international traffic already constituted a substantial part of flag carriers’ revenue, the trend toward privatization and away from state aid was putting increased pressure on carriers to become self-sufficient.

Source: "Beyond Open Skies: The Economic Impact of a US-EU Open Aviation Area," Brattle Group, 2005. This was a study commissioned by the EU.

Ten of the 25 EU member states have not signed Open Skies agreements with the United States, and they account for about half of all EU-US traffic. We refer to the US bilateral agreements with these 10 countries as ‘output restricting’, because they limit to some degree the volume of traffic to and
from the United States. The most restrictive agreement is Bermuda 2, which governs US-UK aviation, the largest single transatlantic aviation market. For passenger services, the 1977 Bermuda 2 agreement:
�� restricts access to Heathrow, London’s preferred airport, to two airlines each from the United States (currently, American and United) and the United Kingdom (currently, British Airways and Virgin Atlantic);
�� limits the number of US cities eligible for non-stop service to and from Heathrow and Gatwick Airports; and
�� effectively caps entry in most markets at one US and one UK airline.
In addition, the British government has used Bermuda 2 to limit the number of flights US airlines can offer and to disallow pro-competitive pricing initiatives. All-cargo services between the United States and the United Kingdom operate under a more liberal regime, with no limits on entry, capacity, pricing or which cities can be served in either country. However, fifth freedom operations [AS: right to serve points beyond first landing] are restricted to three US airlines and only nine countries.

Source: Beyond Open Skies

In sum, the current regulatory regime leads to an ‘artificial’ proliferation of hubs or mini-hubs in Europe to serve the transatlantic market. At the same time, transatlantic routes are effectively insulated from entry by more efficient competitors from different EU member states [AS: not to mention US carriers, as above]. Thus, the current
system impedes the evolution of an efficient network design in Europe.

Source: Beyond Open Skies

edit: formatting