EU COURT RULES U.S./EUROPE ?OPEN SKIES? AGREEMENTS ILLEGAL

EU COURT RULES U.S./EUROPE ôOPEN SKIESö AGREEMENTS ILLEGAL    The European Court of Justice, Europe’s highest court, has declared that several aspects of “open skies” agreements concluded between individual European member governments and the United States are contrary to European law.
   In a ruling issued Tuesday, the European court said the bilateral agreements the United States made with Austria, Belgium, Denmark, Finland, Germany, Luxembourg, Sweden and the United Kingdom discriminate against airlines of other EU countries, and cover areas that are under the exclusive competence of the European Commission.
   “The clause on the ownership and control of airlines constitutes discrimination which is incompatible with community law,” the court said.
   The European Commission welcomed the court’s decision. The Brussels-based body has argued for years that Europe should have a single bilateral agreement with the United States, instead of individual agreements for each EU country. “Today’s judgment is a major step towards developing a new coherent and dynamic European policy for international aviation,” said Loyola de Palacio, European commissioner in charge of transport and energy.
   “In most sectors of the economy, Europe speaks with one voice in international negotiations and takes a leading role in shaping events,” de Palacio said. “Until now, aviation has been excluded from this approach as member states have pursued their own individual agendas.”
   The court case is the latest political conflict between the EC and European national governments. In the customs and maritime fields, the EC has also criticized European national governments for signing separate bilateral Container Security Initiative agreements with the U.S. Customs Service.
   Despite warnings from the European Commission, European national governments have gone ahead and signed open skies agreements with the United States since the mid-1990s.
   The EC believes nationality-based rules in the bilateral aviation agreements hamper competition among European airlines and have prevented the European industry from consolidating into economically stronger, international businesses, “because the national flag carriers cannot risk diluting their pure nationality.”
   Although the EC supports the goal of liberalization, it believes that bilateral negotiations and agreements by individual European governments “failed to take account of the fact that the EU had become one large liberalized market, similar in nature to the American market.”
   It said the bilateral agreements were biased towards the United States. “For example, while U.S. carriers can fly freely from any point in the U.S. to almost any point in the EU under this patchwork of agreements, European airlines can only fly to U.S. destinations from their home country,” it said. The agreements also grant U.S. airlines “fifth-freedom” rights to fly between two points within the EU’s internal market, but European airlines have no rights to fly between different destinations inside the United States.
      “In order to bring the relationship between the (EU) member states and the U.S. into line with community law, there is thus an urgent need to open negotiations between the EU and the U.S. with a view to agreeing an EU-wide replacement for the problematic bilaterals,” the EC said. The EC plans to issue proposals for the negotiation, conclusion and management of international aviation agreements.