Professor Brian F. Havel, De Paul University College of Law
The historic US / EU “Open Skies” Air Transport Agreement went into provisional effect on 30th March 2008. Yet, despite its significance, the Agreement is in reality more of a staging-post on the journey to a truly open transatlantic aviation marketplace. However, approaches to the second stage of negotiations differ. As good as a comprehensive liberalisation agreement may sound, we should be careful to note that substantial barriers of politics and perspective may stand between the concept and the end result.
Historically, the United States has taken the lead role in international civil aviation, while European air transport markets remained tightly controlled. But this polarity began to change in the 1990s. The EU has made large strides towards full market integration for air transport within Europe and is now moving towards promoting EU-style liberalisation on a global scale. By contrast, the recent difficulties faced by US carriers have tilted the US toward a policy of pragmatism. It is clear they do not fully share the visionary perspective that animates their European partners.
The issue of foreign investment and control of airlines remains at the heart of the second stage negotiations. However, a great hurdle to be faced is the clear and present political opposition to a relaxation of ownership rules. What is troubling about these political realities is that airlines in the US are in such a precarious position. Lacking non-US alternatives, airlines in the US can only merge amongst themselves (e.g. Delta and Northwest). More resilient EU carriers might welcome mergers with their US alliance partners, but find these sensible market options blocked.
In time, if “Open Skies” does what its advocates say it will do (e.g. create jobs, lower fares, open more routes) it could be enhanced and extended to other regions of the globe. For now, however, the negotiators have just begun to address the formidable challenges of the second stage. Visions of a global settlement must await the hard and unpredictable days and months that lie ahead.