'Open Skies' agreement between Europe and the United States

24 August 2009
by inadim -- last modified 24 August 2009

The 'Open Skies' agreement concluded between the European Union and the United States of America provides for all transatlantic routes to be opened up to European and American companies. It also includes an arrangement to develop the agreement further on matters such as airline ownership.

Decision 2007/339/EC of the Council and the Representatives of the Governments of the Member States of the European Union meeting within the Council, of 25 April 2007, on the signature and provisional application of the Air Transport Agreement between the European Community and its Member States, on the one hand, and the United States of America, on the other hand.

SUMMARY

With the new agreement, airlines in the Union can:

• operate flights to the United States from any European airport, regardless of their nationality (the United States recognise them as European);
• operate without restrictions on the number of flights, aircraft or routes;
• set prices in line with the market;
• conclude cooperation agreements.

Companies in certain Non-EU Member Countries (countries in Europe that don't belong to the EU, plus 18 African countries) may also receive Community investment without this affecting their traffic rights to the United States. Similarly, the United States will not call into question the flights of Community airlines if non-EU European countries have invested in their capital.

The agreement also strengthens cooperation between the two parties on safety, security, competition policy, State Aid, consumer protection and the environment.

On the subject of airline ownership, Europeans will be able to hold more than a 50% share in American carriers, but not to gain overall control: under American law, a foreigner may not hold 25% voting shares in an American company and may not control it. The EU side therefore reserved a right to restrict American investment in European companies to the same level.

Towards new negotiations

The negotiations also led to the establishing of a mechanism for opening up transatlantic air travel even further by doing away with the restrictions still in place, particularly as regards ownership of American airlines. The agreement thus calls for negotiations to be resumed in the two months following its entry into force. Moreover, the EU reserves the right to suspend certain parties from the agreement if the dialogue prevents further progress in the next three years. The aim of the Council of Ministers is therefore to achieve the complete liberalisation of air transport.

Background

Air transport to the United States was until now governed by bilateral agreements between Member States and the American authorities. Sixteen Member States already had 'open skies' agreements in place. Yet this fragmented approach proved to be an obstacle as it prevented completion of a genuine single market.

On 5 November 2002, the Court of Justice made a number of judgments in cases referred to it by the Commission (C-466-469/98, C-467/98, C468/98, C-469/98, C-472/98, C-475/98 and C-476/98) which put an end to these agreements and contributed to this being recognised as a matter to be handled at Community level.

As a result, the Commission received a mandate to negotiate an air agreement with the United States that applied for the Community as a whole. After four years of discussions, the negotiators came to an agreement on 2 March 2007. At the request of the United Kingdom, entry into force was put back to 30 March 2008.

Source: Summaries of EU Legislation