Friday, March 23, 2007

EU in joined-up thinking shock!

Nah, only joking! The EU has done a deal with the US.
European Union transport ministers have unanimously backed an "open skies" aviation deal with the US aimed at liberalising transatlantic air travel.
...

The EU said consumers would see a total of up to $16bn (£8.1bn) in economic benefits as a result of the deal, as increased competition brings down air fares.

Well, of course this is very good news (and fits in with Barroso's newly articulated philosophy—apparently he likes free markets) but doesn't it clash somewhat with the EU's green taxes and its rather hardline stance on climate change?

Are these people actually listening to each other?

4 comments:

Trixy said...

I am not such a fan of 'open skies'. Firstly, because despite the Transport Secretary voting against it, it went through by 26-1. So despite a rule being classified as not in British interests, the UK can do nothing about it.

Secondly, just because LHR is efficient, why should foreign airlines take British airline slots? They are allowed to fly from their own countries.

One could argue that it would bring prices down, except that prices in airlines are oligopolistic. What it will mean is that the people who live around LHR and who put up with the noise, the traffic etc. because the airport is so important to the british economy and to their income in particular, now have the costs but fewer of the benefits.

Umbongo said...

DK

You're being unusually credulous.

If the LHR slots were open to genuine price competition (ie anyone could buy them) and any airline could fly to/from LHR as long as it bought or rented slots then maybe, maybe consumers and the taxpayer would benefit. As Trixy says this is an oligopoly dealing amongst themselves and, moreover, dividing up the goodies of a UK asset.

Further, despite the spin from the DoT, the US has not conceded anything (now or in the future) on non-US ownership of US airlines and intra-US flying for non-US airlines. The EU (excluding the UK) has a small benefit, the US has a huge one and the UK pays (sound familiar? It's the same mantra whenever our brilliant diplomats or civil servants "negotiate" on our behalf ie "where do we sign?").

Josh said...

Intra-US flying requires the eighth freedom. This agreement only covered the fifth freedom. It allows US carriers to do intra-European flights but only those involving transit between two different countries. They can't fly a route within a single country, just as a European carrier can't fly a route within the US, also a single country.

The way to achieve apparent balance would be establishment on a sovereign Europe. It would mean that the intra-European flights Americans can fly now couldn't be flown unless the eighth freedom was agreed.

Of course, I don't think any of us want that.

Dan said...

I really don't understand why the green movement sees the open skies deal as an issue.

Surely they don't think that the way to limit traffic is to only allow certain carriers to use the routes?

Better regulation in a liberalising market is what we should be pushing for. The EC's plan to include aviation in the EU Emissions Trading Scheme won't make any difference for several years.