In Washington last week, the German Federal Minister of Transport, Building and Urban Affairs, Wolfgang Tiefensee, in his capacity as EU Council President, signed the Open Skies Agreement between the EU and the US. Also present at the signing ceremony at the State Department were the Federal Foreign Minister, Frank Walter Steinmeier, the Vice President of the European Commission and Transport Commissioner, Jacques Barrot, the US Secretary of Transportation, Mary Peters, and the US Secretary of State, Condoleezza Rice. The Open Skies Agreement places air services between Europe and the US on a new basis.

Commenting on the signing, Mr. Tiefensee stated in Washington: ‘The Open Skies Air Services Agreement marks a historic step. In many points, it is a milestone on the road towards a deeper transatlantic partnership. This agreement provides air services with a reliable and modern set of regulations. Both sides will benefit. In a first step, the aviation markets in Europe and the USA will be opened up further. In the future, European airlines will be able to fly to destinations in the USA from all Member States. Market access will also be improved for US carriers. Consumers will benefit from this. There will be a further improvement in air services between Germany, Europe and the United States of America. Increasing competition will have a positive impact on ticket prices. This will make travel easier and deepen contacts.

‘Open Skies is merely a first step. Europe is pressing for further steps. Immediately after it has entered into force, we will therefore launch a new round of negotiations. The door to a genuine Open Aviation area will then be open. We want to further liberalize transatlantic air services. The objective of the negotiations will therefore be additional traffic rights and fewer restrictions on European ownership and control of US carriers. We hope these negotiations will soon be successful. This does not just make economic sense. Because when people meet and visit each other frequently, this produces the trust that will consolidate and deepen the transatlantic partnership. Both Europe and America will gain from this.

‘The negotiations on the Open Skies Agreement had, at times, ground to a halt. Even as recently as February, when I visited the USA with my friend Jacques Barrot, negotiations were not making any progress. Together, we have got them going again, because it was obvious that my American counterpart, Mary Peters, was also keen to reach a speedy agreement. On March 22, the German Council Presidency finally reached political agreement in the EU Transport Council. I am delighted that the Open Skies Agreement will enter into force on 30 March 2008.’

The main features of the agreement, which brings the two leading aviation markets in the world closer together, are as follows:

  • In the future, European airlines will be able to fly to the USA from all EU Member States. Vice versa, US airlines will be able to choose their European destinations more freely.
  • It explicitly clarifies new possibilities for marketing air services using franchising and branding.
  • It also embodies a joint understanding on the exemption of the alliances from anti-trust rules.
  • European airlines may now, for the first time, participate in the so-called ‘Fly America’ program. This means that they may also carry US government officials, who are currently supposed to fly with US carriers, and operate certain cargo flights.

In the next phase, a step considered important from a European perspective has to be taken. Foreign airlines have to have better investment opportunities and a greater say in the USA. Under existing US law, European carriers may only invest in American carriers to a limited extent and may not exercise any control. The maximum share of voting capital allowed is currently 25%. The round of negotiations that starts in May will discuss this arrangement.