US and German transport officials are planning a round of December talks that could lead to open skies between the two countries by early 1996. However, what has become a strong link between open skies and antitrust immunity - sought by the United-Lufthansa alliance - could be a stumbling block to full-scale liberalisation.
Germany and the US have held informal talks since August, building up to the December negotiations that will attempt to redefine US-Germany open skies. Currently, the two sides operate under a phased liberalisation package, with open skies scheduled for late 1997.
But the US is pushing for an earlier date. And since 1996 is a US presidential election year, both sides believe that if an agreement is not reached soon, they will have to wait until 1997. A US official says that there is a 'reasonable expectation' that open skies can be implemented by early 1996.
Germany wants a new open skies definition drawn up and refuses to use the recently completed US open skies agreement with nine smaller European countries as a blueprint. Those negotiations produced agreements with vague language seeking immunity, only awarded to the North- west-KLM alliance in 1991.
Yet sources indicate antitrust immunity could become a divisive issue. Lufthansa's primary reason for pushing for open skies earlier is to get immunity rights with United, and, potentially, SAS, a new codesharing partner of both carriers. US policy has been never to promise immunity in exchange for open skies privileges, but a Lufthansa source says 'each side will know there is a direct link.'
Still, it didn't take long for Delta, Swissair, Austrian Airlines and Sabena to apply for antitrust exemption. The US Department of Justice is currently examining a review of the group's application. US officials are concerned that the partners will have immunity to set pricing among themselves and sit in on Iata's regional pricing talks, long opposed by the US. One US source believes approval may be used as a tool to 'chip away' at that practice by barring the alliance members from such talks.
Though many believe the request will be approved, the DoJ is unpredictable enough for some antitrust lawyers to suggest that the US may not only reject Delta's application, but go a step further by stripping the Northwest-KLM alliance of immunity when an extension is sought next year.
Separately, SAS has essentially ended its codesharing alliance with Continental Airlines and will instead codeshare with United at Newark. The two carriers will also link up in Chicago and Washington DC, and plan to do so at Amsterdam and London, though neither the Dutch nor UK authorities have approved such services.
Source: Airline Business
