Announcement

5 March 2007

EU and US Announce Tentative Open Skies Agreement

Alexandria, VA -- Alexandria, VA -- The European Union (EU) and United States (US) agreed Friday, 2 March 2007, to the outlines of a new pact to open their trans-Atlantic aviation markets and permit larger stakes of European companies in US airlines in the hope of boosting traffic, lowering fares and creating jobs.

The provisional agreement is scheduled for review by EU transport ministers 22 March 2007. Subsequent negotiations and approvals are likely to occur at the scheduled US-EU summit in May 2007. The first-stage of the proposals, if approved by US Congress and EU Minters, is scheduled to enter into force as early as 28 October 2007.

US Transportation Secretary Mary E. Peters commented on the tentative Open Skies Agreement, stating “The U.S. and the EU have come together today to open our skies and expand the freedom of air travel between the world’s two largest aviation markets. Our agreement will offer more choice and convenience to American consumers, promote new growth in our aviation industry and support our continued economic expansion. I look forward to working with my counterparts within the European Union to rapidly finalize this historic agreement for the benefit of travelers and shippers, airlines, airports and our respective economies.”

Earlier deals from 2005 and 2006 remained unsigned after Washington withdrew a proposal that would have eased restrictions on foreign investment in US airlines. The provisional agreement reached on Friday sought to address EU concerns about ownership and control, with some news agencies reporting an agreement enabling European companies to own up to 49.9 percent of US airlines, up from the current 25 percent limit (Yahoo News), while yet other early reports state the US will not change rules limiting foreign ownership of voting rights in US carriers, but would make it easier for EU companies to buy up to 100 percent of non-voting shares (CNN Money)

The tentative agreement would further allow European airlines to fly from anywhere in the EU to any point in the US, and vice versa, with the possibility for EU carriers to fly onwards to other nations after a stopover in the United States, known as "fifth freedom" rights.

The EU forecasts the proposed agreement could generating 26 million additional trans-Atlantic flight passengers over the next five years, providing up to $15.8 billion USD (€12 billion) in economic benefits and creating 80,000 new jobs in the EU and US combined.

For more details, see Reuters 2 March 2007 EU, U.S. agree tentative "open skies" deal.