Europe Court: 'Open Skies' Illegal
By Constant Brand
Associated Press Writer
Tuesday, November 5, 2002; 9:04 AM
BRUSSELS, Belgium –– The European Court of Justice ruled Tuesday that eight EU states acted illegally when they signed bilateral air deals with the United States offering advantages to their national flag carriers.
The EU high court ruling gives the European Commission crucial legal backing in its battle to replace national governments in negotiating air traffic agreements with the United States and other nations.
In its judgment, the Luxembourg-based court said the bilateral "open skies" accords with Washington violated EU law since they infringed on the power of the EU head office to regulate and negotiate air transport accords with non-EU nations.
The court added the bilateral agreements also discriminated against airlines in EU countries that signed no such deals with the United States.
The ruling, which is binding and cannot be appealed, means the eight member nations – Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Britain and Germany – must renegotiate their bilateral airline accords with Washington to bring them into line with EU law. The court is still considering similar cases against Italy, France and the Netherlands and Portugal.
"The agreements ... are now null and void," EU Transport Commissioner Loyola de Palacio told a news conference.
She urged national governments to quickly give the EU Commission a mandate to negotiate a pan-EU "open sky" pact with the United States.
"It will be the Commission who will have to negotiate on behalf of the 15 member states," she added, warning that failure of member nations to comply with the ruling would mean they could face hefty fines.
The decision could have far-reaching implications for trans-Atlantic air traffic by allowing European airlines greater freedom to fly to the United States from EU nations other than their own.
The Commission says that will increase competition on lucrative trans-Atlantic routes, bring down air fares and make it easier for European carriers to merge.
De Palacio said the Commission would shortly introduce proposals setting out how it would hold talks between the EU and Washington in signing a "Trans-Atlantic Common Aviation Area," opening up airline competition between the two sides.
In London, Richard Branson, chairman of British airline Virgin Atlantic, said the decision should lead to pan-EU deregulation of the airline industry, and more competition, giving consumers cheaper fares, and better service.
Virgin Atlantic and other smaller airlines has fought hard over the years to gain access to routes between Britain and North America that have traditionally been dominated by British Airways and major U.S. airlines.
The "open skies" agreements between the United States and individual European nations let U.S. airlines fly into EU countries from anywhere in the United States but let European carriers only fly to the United States from their home bases.
For instance, KLM Royal Dutch Airlines can fly to American airports only from Amsterdam, not Madrid or Rome, thereby protecting its home base at the expense of other EU carriers.
De Palacio argued that by negotiating on behalf of all 15 EU states the Commission can strike a better, fairer deal for European airlines, notably by securing rights to fly on domestic U.S. routes.