Memorandum by Air 2000 (AS 06)
AIR SERVICE AGREEMENTS BETWEEN THE UNITED
KINGDOM AND THE UNITED STATES
Air 2000 submits that the continued failure to resolve
the negotiations over the bi-lateral air services agreement between
the United Kingdom and the United States is primarily the result
of a divergence of views on what constitutes "open skies".
Air 2000 believes that the underlying principal
of bi-lateral agreements is that any agreement should be balanced,
fair to both sides, with reciprocal rights being granted. What
is evident from the present impasse is that the UK and the US
have clearly diverging views on what is balanced, fair and in
particular reciprocal.
FIFTH FREEDOM
RIGHTS
The US are seeking fifth freedom rights into
Europe, yet refuse to consider rights into the US as equivalent.
OWNERSHIP AND
CONTROL
At present a US entity may own 49 per cent of
a UK carrier, or tour operator, yet the US continues to maintain
its 25 per cent ownership restriction to any UK entity wishing
to purchase a US company.
WETLEASING
The US has a different policy on wetleasing
to that of most other countries with whom we deal. In particular
a UK carrier is permitted to wetlease a US aircraft into its fleet
on a seasonal basis, such an aircraft once approved, is permitted
to operate any flight that the lessee carrier can lawfully operate.
There are numerous instances of UK carriers wetleasing US carriers
aircraft into the UK market, where the US operator maintains the
safety oversight, but the economic and licensing authority rests
with the UK carrier.
Within the US they maintain a regime that requires
any wetlease aircraft to be operated under the lessor carriers,
safety oversight and its own economic and licensing authority.
To demonstrate the absurdity of the US position
we will explain the situation that exists under a present wetlease
agreement between Air 2000 and Aero Continente, a Peruvian carrier
operating between Peru, Panama and Miami.
For any flight operated into Peru and Panama,
both the Peruvian and Panamanian authorities permit the wet leased
aircraft to operate under Aero Continente economic authority,
route licences and designation. Whilst the safety oversight is
maintained under the UK CAA regulations. However when the aircraft
operates for Aero Continente into Miami, the US require the flight
to be operated in accordance with the AIR 2000 Foreign Air Carrier
permit[21]
and its US economic authority, with the UK CAA safety oversight
being retained. The aircraft may operate under Aero Continente
flight numbers, and it is Aero Continente who are the marketing
carrier, and accepting the commercial risks.
In contrast however, the Aero Continente US
permission[22]
is conditional upon the flights being operated by a wetleased
aircraft!
The reason for this discrepancy is that the US Federal
Aviation Authority does not recognise the split of responsibility
between the lessor carrier safety oversight and the lessee carrier
economic and licensing authority. This in our view is blatant
protectionism of US carriers.
WETLEASING TO
A US CARRIER
If Air 2000 were to attempt a wetlease to a
US carrier, it would not be permitted to operate any Domestic
(cabotage) sectors, whereas the UK permission for a US carrier
wetleasing into the UK would grant cabotage rights by virtue of
being permitted to perform any flight that the UK carrier could
legally perform[23].
FLY AMERICA
The US operates a policy requiring all Government
employees and goods to be carried only on US carriers, worldwide.
Under the EU competitive tendering regime, UK government departments
are required to seek competitive tenders for its contracts. Thus
US carriers may bid for and obtain Contracts for carriage of UK
government employees and goods.
NON-SCHEDULED
(CHARTER) FLIGHTS
TO THE
US
Air 2000 has benefited from the generally relaxed
provisions for the operation of non-scheduled flights to and from
the US, and is currently one of the UK market leaders operating
14 return services per week to the US.
Air 2000 also operates a number of extra bi-lateral
flights into and through the US, where under precedent and reciprocity,
the US has agreed to flights being operated that fall without
the scope of Bermuda II and subsequent amendments.
Unfortunately, when UK/US discussions have stalled,
1996 and 2000, the US Department of Transport seeks to use these
permissions, which have been regularly exercised since 1986, as
leverage to get the UK government to move. Thus we constantly
have the "Sword of Damocles" hanging over our heads,
when such permissions are due for renewal, every six months. The
uncertainty this engenders does not enable us to move forward
and plan our flight programmes with confidence.
SUMMARY
Air 2000 fully supports any moves to liberalise
air services between the United Kingdom and the United States,
but any such liberalisation must be based upon the principal of
the agreement being balanced, fair to both sides and reciprocal,
in all areas. Thus any mini deals or staged agreements must also
meet the foregoing test of fairness, balance and reciprocity.
Without such a test any agreement under the current US proposals
would be imbalanced and to the detriment of UK carriers.
21 Air 2000 Statement of authorisation-Annex A. Back
22
Aero Continente-US DoT-Notice of Action taken (Annex B). Back
23
Sample UK wet lease permission from DETR. (Annex 3). Back
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