The European Union will attempt this month to kick-start its stalled "open skies" talks with the US, with a new drive to give European airlines the right to buy their struggling American counterparts.
Jacques Barrot, the EU's transport commissioner, said the US should respond more favourably to the EU's ownership demands given the continued financial woes of US airlines. At the same time, he extended an olive branch to the US by describing the controversial issue of cabotage - a foreign airline's right to fly on another country's domestic routes - as no longer "a priority subject in the negotiations".
Mr Barrot is due to visit Washington on March 21st and 22nd to try to revive the negotiations which broke down last year when EU ministers rejected a proposal tabled by Washington.
Cabotage is one of the ways European airlines have been hoping to access the lucrative American hinterland market, including destinations such as Los Angeles. But buying into the US aviation sector or setting up local subsidiaries would be an alternative approach.
Last year, EU ministers also dismissed as insufficient a US offer to raise the foreign control threshold from 25 per cent to 49 per cent. Mr Barrot said: "The Americans need to have investment in their companies, which are struggling and, because of their rules, they are depriving themselves of capital."
He added: "Questions like cabotage, which have perhaps monopolised too much attention, are not the major priority."
His comments came as chief executives of European and US airlines met yesterday in Washington to discuss the structural problems facing the industry. However, American Airlines is understood to have blocked efforts to put the EU-US aviation negotiations on the formal agenda of the meeting. - (Financial Times Service)
