Air travel accord urged

European ministers ask Britain's support as two airlines object

March 08, 2007|By New York Times News Service

PARIS --European transportation officials urged Britain yesterday not to scuttle a landmark deal on trans-Atlantic air travel because of opposition by its biggest carriers to opening up Heathrow Airport, which serves London.

Officials expressed dismay over remarks by the British transport secretary, Douglas Alexander, who implied this week that London would not support the draft "open skies" agreement, announced Friday, in its current form.

"Seeing the importance of this issue, we sincerely wish for a consensus agreement," said Michele Cercone, a spokesman for the European Union transport commissioner, Jacques Barrot.

"Mr. Barrot will certainly be working toward having that consensus," Cercone said.

Less than a week after the European Union and the United States announced a breakthrough agreement to open up air travel, British Airways and Virgin Atlantic, which stand to lose from increased competition on lucrative trans-Atlantic routes, have begun an intense effort to quash the deal ahead of a vote by European transport ministers this month.

Alexander criticized the accord Tuesday as "falling short" because it did not give European carriers the right to fly between American cities and because strict limits on foreign ownership of U.S. airlines would remain in place.

Among several major rule changes, the open skies accord would scrap restrictions that for decades have given four airlines - British Airways, Virgin Atlantic, United Airlines and American Airlines - exclusive rights to fly between the United States and Heathrow, Europe's busiest airport.

Despite their lobbying efforts, British carriers could find themselves isolated on the issue. Major airlines in Europe have publicly welcomed the accord.

Air France-KLM, the largest European carrier, praised the deal this week as creating "a more harmonized regulatory framework."

The German-flag carrier Lufthansa also said it favors the deal, which it describes as an "important first step" toward fully deregulated trans-Atlantic air travel.

Alexander's remarks followed a steep 6.6 percent slide in British Airways' shares Monday as investors worried that the deal would cut into the carrier's profits. British Airways earns about 60 percent of its revenue on trans-Atlantic routes.

As a sign of how aggressively British Airways is opposed to the agreement, the company's chief executive, William L. Walsh, sent letters Tuesday to Alexander and Barrot, urging them to rethink the deal, which he said gave away too much to American carriers and offered little in return.

The chairman of British Airways, Martin F. Broughton, also appealed to the German chancellor, Angela Merkel, calling the draft agreement a "dead end that we would be stuck with for many years to come."

Broughton asked Merkel to use her influence as the current president of the European Union's Transport Council to block the deal.

Virgin Atlantic has joined British Airways in criticizing the accord.

Paul Charles, a Virgin Atlantic spokesman, called on Europe and the United States to be "bold enough" to open air travel markets fully so that any carrier on either side of the Atlantic would be free to fly to any destination.

"That would be a template that could be used to create opportunities for consumers worldwide," Charles said.

Virgin Atlantic flies to about 20 destinations from Heathrow, eight of them in the United States.

Opponents of the deal have hinted at the possibility that it might be derailed by a legal technicality. A Reuters report from Brussels, Belgium, quoted an unnamed European diplomat yesterday as saying that the accord would require unanimous backing by all 27 European member states, raising the possibility of a British veto.

Officials at the European Council's legal office could not be reached for comment, but Cercone disputed the diplomat's claim. In the past, he noted, aviation agreements have been treated as community issues requiring passage by a qualified majority of member states representing at least two-thirds of the total EU population.

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