Management at Virgin Atlantic Airways believes
failure by negotiators to reach terms on the lifting of foreign
ownership restrictions of US airlines will hurt US carriers far more
than their European counterparts.
A stipulation of the open skies deal brokered by the European Union (EU)
and the USA – which takes effect this month - is that individual EU
states retain their right to withdraw newly-granted landing rights if a
second phase deal that addresses ownership restrictions is not reached
by 2010.
Virgin Atlantic director of external affairs and route development Barry Humphreys told Air Transport Intelligence (ATI), flightglobal.com's sister premium news source at the Phoenix Sky Harbor International Aviation Symposium
that US airlines have spent hundreds of millions of dollars for slots
at Heathrow, while Virgin Atlantic has not made a similar investment
and British Airways’ expansion has been minimal.
Continental Airlines recently disclosed it paid $209 million for its
Heathrow slots to support flights that begin from its Houston and New
York Newark hubs on 29 March.
Having spent sizeable sums, US airlines that have gained slots at
Heathrow might feel moved to pressure government to advance
negotiations to lift restrictions, says Humphreys. The Virgin Atlantic
executive believes “the problems are not with the negotiators” but
rather that the attention needs to be placed on the US Congress.
Participating on a conference panel to discuss foreign ownership,
Humphreys said little movement is likely in the second phase of
negotiations before 2009 after a new US Presidential administration is
named.
Even with fresh talks, a foreign ownership deal is unlikely to be
reached by 2012, according to FedEx VP regulatory affairs Steven Taylor
and United Airlines managing director international and regulatory
affairs Julie Oettinger.
Oettinger says a gradual increase in ownership levels from the
current 25% to the European cap of 49% is “almost wasted effort”.
Citing other deals reached within the EU, Oettinger notes that Air
France/KLM and Lufthansa/Swiss have replaced American Airlines and
United as the largest carriers in the world, with the ability to invest
in aircraft and infrastructure.
