A sceptical but curious US delegation is preparing once again to sit down with UK aviation representatives in mid-February for informal talks on open skies, although the mood in Washington is pessimistic.
While the USA now has more than 30 open skies agreements in place around the world, a new bilateral with the UK remains frustratingly out of reach. Since walking away from the last set of formal talks in London last October, US negotiators see little to persuade them that progress might be made during the February meetings. Many in Washington DC are quietly speculating that an open skies deal may not be achieved until well after 2000. But, publicly at least, the Department of Transportation (DoT) hopes the latest talks will help to keep the doors to dialogue open.
The mood of scepticism is also apparent at American Airlines. Having once again seen an October deadline slip by, and along with it the chance to seal an antitrust-immunised alliance with British Airways in time to coordinate 1999 schedules, American seems in no rush to accept any compromise deals offered early in the year. "We are weary of hoping for anything," says American. "We continue to believe that both countries want to reach a new aviation agreement that includes open skies. But our focus is on implementation of the oneworld alliance. From a competitive and a commercial point of view, we cannot just wait for something to happen."
The failure to reach a deal is especially frustrating for US negotiators. The DoT and the State Department have secured open skies agreements with relative ease almost everywhere else in the world. Phased-in deals, such as those agreed with France and Japan, have provided the answer where negotiations have been difficult.
The UK, however, is proving most problematic of all. US politicians have grown to feel affronted at what they regard as British protectionism, but they are also wary of a deal that hands over automatic immunity to AA/BA. Aviation representatives have other priorities this year - open skies talks that promise faster rewards. In particular, talks are planned with Argentinian officials in March, while Africa remains in sharp focus following DoT Secretary Rodney Slater's visits to that continent in 1998.
The wildcard in any 1999 negotiations is the outcome of the US President's impeachment trial, which could throw any schedules off track.
Still, the chance to secure a satisfactory deal with the UK is an itch that the USA cannot help but scratch. DoT deputy assistant secretary Patrick Murphy has reiterated Clinton's commitment to signing as many open skies agreements as possible by 2000. Pointedly he has highlighted figures that show average fares in US-Europe open skies markets to have dropped by more than 5% in 1996-7 compared with a 6% increase between the USA and the UK.
In contrast to American, BA appears to be have some hope that UK negotiators will soon broker its wish for a phased-in bilateral and alliance but also admits that this may be jeopardised if London decides to back Virgin Atlantic's demands for US cabotage rights. BA now says it wants to see a bilateral in place before requesting anti-trust immunity, which suggests a fully blown open skies deal and AA/BA are a long way off.
The UK's DTI is waiting for the EU Commission's judgement - due in April - before it makes its views on AA/BA known. But, says a spokesman for Competition Commissioner Karel Van Miert, "in the absence of a UK-US open skies agreement the alliance will not fly, we have stayed proceedings."
Meanwhile, Brussels appears to be making headway on its demand for a open skies negotiating mandate. Most member states and most airlines "are with the Commission," says a spokesman for Transport Commissioner, Neil Kinnock, except the UK, which wants to "sees off AA/BA first".
Source: Airline Business
