Examination of Witnesses (Questions 100
- 119)
WEDNESDAY 24 MAY 2000
MR PHILIP
MEESON AND
MR STEVE
GUYNAN
Chairman
100. You will give us a copy of that, Mr Meeson,
as you have read it out?
(Mr Meeson) Certainly.
Miss McIntosh
101. I am not through yet, so if I could just
carry on? May I just say that his comment, Lord MacDonald's comment,
was that he was minded to negotiate on the basis of reciprocity.
Do you have any evidence that you might have changed his mind—Lord
MacDonald—from his comments made in January, 2000? And just
on the back of that, do you believe it is essential to amend Article
7 of the Chicago Convention before a reciprocal agreement could
be negotiated in advance of the next set of voluntary agreements?
(Mr Guynan) My understanding of Article 7 is that
it gives countries the right not to grant cabotage. It does not
prohibit them from doing so. If the Americans were minded to open
up their domestic market they could do so. The issue is more whether
the political will is there to do so rather than whether there
is an international treaty obligation preventing them.
102. In your evidence you make reference to
the fact that the Commission is taking a number of Member States
to Court for negotiating some rather, in its view, liberal `Open
Skies' agreements as being a distortion of the operation of a
single market. Are you supportive of that and do you think it
will expedite EU negotiations to a final and satisfactory experience
in the future?
(Mr Guynan) I think we are supportive in the sense
that it needs clarifying and the court case will clarify whether
the Commission does have a case. As I said before, in terms of
whether we would support a Commission mandate, that depends very
much on what the mandate says. If it ensures that we get a reciprocal
deal where cargo rights are traded for cargo rights, then I think
we would be broadly supportive, but what we would not want to
see is the UK market, which is the one remaining market that has
not been opened up to the US, we would not want to see that sacrificed
in return for some esoteric deal that involved hush-kits and bananas.
Mr Stevenson
103. When I asked the question earlier on about
Mr Smith from FedEx saying that Fifth freedom, Seventh freedom
rights were on the table from the US, I think I understood you
correctly by saying: "Ah, but they want the rights to operate
from here into Europe as well and that is our domestic market".
The question I need to ask so that there is no misunderstanding
about this is, was the US offer seeking to establish that if they
could operate from here into Europe they would also open up their
market? Was that as you understood it?
(Mr Guynan) There was no offer from the Americans
to open up their domestic market.
Mr Stevenson: None. Thank you; that is fine.
Mr Olner
104. Mr Guynan, you do regard the European market
as your domestic market?
(Mr Guynan) It is our domestic market, yes.
105. Fine, So do you believe it is inevitable
then in the medium to long term that air service agreements will
be reached between the US and Europe as a whole rather than on
a bilateral basis?
(Mr Guynan) I think again I would make the point that
it depends on the nature of the mandate.
106. You seem to me to be sitting on one horse
at one time in the UK and sitting on the European horse the other
time. Which is the horse that will lead you to victory?
(Mr Guynan) If you take the view that traffic rights
are a trade issue, which fundamentally they probably are, then
inevitably in the very long run it is probably a case for Europe
to investigate.
107. But that is in the long term; what about
the medium to long term?
(Mr Meeson) Could I just say that in the medium term,
as Miss McIntosh has read out, that Lord MacDonald has said that
liberalisation does not mean liberally conceding competitive advantage
to the carriers of any other State. The Government has constantly
said they support our case. They are negotiating on that basis.
They are the negotiators; we support them.
108. Given that some of your evidence to this
Committee has suggested that other European countries have been
salami sliced, is it not better now that we all come together
and negotiate on behalf of the whole of the UK so the UK can get
part of the action?
(Mr Meeson) I am very concerned because it is very
important for me to say to you that Britain is the largest independent
operator—has the largest amount of independent aircraft
operators. We have a much larger independent airline community,
both in the IT business, the passenger business inclusive tours
and in the cargo business than most of the other European countries
put together. So this is a prize. Liberalisation of the skies
in the UK and the US are both extremely important. This would
be a gateway into Europe for the US and in return for a gateway
to Europe from the UK, which is one of their largest trading partners,
we believe we should get reciprocity and equal rights in the US.
109. Mr Meeson, I do not want to put words into
your mouth, but so it is absolutely clear for the record what
you just said in that answer is that the rest of the European
players—France, Germany, Spain and others—are small
fry compared to what the UK can offer in the Cargo Alliance?
(Mr Meeson) Indeed.
(Mr Guynan) Yes.
Chairman
110. I want to ask you finally, what proportion
in terms of aircraft numbers and operational flights of your members'
operations are flown on Russian-built aircraft, using Russian
crews?
(Mr Guynan) Chairman, I will correct a misconception
here that has been commonly reported. Our airlines are bona
fide British airlines. They operate British registered aircraft,
crewed by British crews, operated in accordance with CAA standards
and maintained to British standards in British facilities.
111. Then where did the misconception arise,
Mr Guynan?
(Mr Guynan) The misconception arises, because in addition
to that business as bona fide British carriers, two of
them also operate specialist outsize, extra large cargo movement
businesses, using types of aircraft that are not available in
the Western world and they are Russian aircraft. However, they
are leased in or they are merely represented as sales agents by
our airlines. They are not operated—
112. Wait a minute; careful. They are leased
in?
(Mr Guynan) They are leased in, in which case they
are under the CAA's supervision, they meet equivalent safety standards.
113. And the crews?
(Mr Guynan) And the crews are Russian, yes. But they
are not employed by our airlines and they are not on the registers
of our airlines.
114. Let us not be too nice about the English
language here, Mr Guynan. I need some precision?
(Mr Guynan) Okay. I think in total there are around
12 Russian aircraft currently represented by our members. Not
operated by them; represented in sole flying.
115. Represented by, but not operated by?
(Mr Guynan) Not operated on our AOCs. In other words
we are not responsible for the crewing, maintenance and administration.
116. Now I ask again, what proportion of the
business does that represent?
(Mr Guynan) In terms of tonnage lift, probably around
15 percent, 20 percent.
117. And is that growing or diminishing?
(Mr Guynan) It is growing because it is a very specialist
area and it is a unique area of business.
118. Is it likely to grow at the expense of
British trade?
(Mr Guynan) No, it facilitates British trade. There
are very few types of aircraft in the world that could
move the turbine of a power station and the Antonov124
is that type of aircraft. There is nothing equivalent to it in
the Western World.
119. Yes, I would not have thought it was a
sort of overwhelming market demand?
(Mr Guynan) No, it is not.
(Mr Meeson) May I just say that the members of our
Alliance have invested hugely in British aircraft, both the 146—
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