Alan George/BRUSSELS
Mounting controversy over the legality of bilateral open skies agreements between the USA and individual European Union member states is threatening a further twist to the American Airlines and British Airways alliance as approval nears.
The European Commission (EC) is set to clear the partnership in mid-May. High-placed Brussels sources say the deal will require the two airlines to give up 280 slots a month at London Heathrow to lessen the dominance of the carriers on transatlantic routes into London. In addition, they will have to relinquish slots at London Gatwick. The source says that, under European regulations, the EC has no powers to reserve slots relinquished by the alliance for US airlines. Slot allocation will be on a first come, first serve, basis, he says, noting that British Midland has already requested 10 slots a day to start operations to North America.
An EC ruling on the Star Alliance led by Lufthansa and United Airlines, is also expected in May, although decisions on other transatlanic links are not expected until the third quarter of the year.
Even after EC approval for the BA/American deal, the UK will have to agree to a US open skies agreement for the alliance to win US anti-trust immunity. Negotiations on the bilateral are well advanced and a deal could be signed by October - at about the time the US authorities are expected to approve the pact.
Alliance approval, and the consequent open skies agreement, is likely to by mired by EC insistence that such bilateral agreements are unlawful under the terms of the European single market. The Commission has been seeking, so far unsuccessfully, a mandate from member states to negotiate a European-wide open skies agreement with the USA.
The UK is expected to press on with its open skies accord, but would then face litigation from Brussels. If the courts ruled against London and forced an abrogation of a UK-USA open skies accord, the consequences for the alliance would be severe, although a legal challenge could take years. It would also embroil other EU nations and alliances which operate under similar agreements.
"By entering into an open skies agreement, the UK would expose itself to the certainty of Commission enforcement action which could culminate in action before the European Court," says Trevor Soames, aviation specialist at European law firm Norton Rose in Brussels.
In the face of member states' intransigence over the issue, Transport Commissioner Neil Kinnock wrote to eight EU countries, including Belgium, Germany and Sweden which have open skies agreements with Washington, insisting that the accords were unlawful. The states were given until mid-May to respond, after which European Court procedures could get under way. The UK also received the warning as it has a mini-deal giving unfettered access to regional airports. The Netherlands was not a recipient of the letter, even though it concluded the first open skies deal, but will now be included in any legal action by the EC.
The issue is set to dominate the next meeting of European transport ministers on 17-18 June.
Source: Flight International
