Continental on U.S., Europe sky deal

Continental Airlines says that EU statements acknowledge that approval of an EU, U.S. open sky deal hinges on Europe getting the U.S. to relax federal laws on overseas ownership and control of U.S. airlines.

In its latest statements, the E.U. has clearly expressed doubts about the U.S. Department of Transportation’s (DOT) ability to change the interpretation of this law on overseas ownership without legislative action by the U.S. Congress.

With open skies and foreign ownership/control so strongly linked, it is clear that the two sides have plenty of negotiating room to address important related issues not covered by the text of the proposed open skies agreement.

The key issue that the U.S. has failed to address is that the proposed open skies agreement does not give U.S. airlines the true ability to operate at Europe’s largest airport, London/Heathrow.

While an open skies agreement theoretically permits flights to Heathrow, there are no commercially viable slots and facilities available at Heathrow that would allow an airline like Continental to begin service there.

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The U.S. needs to address the anti-competitive Heathrow situation. There is no reason to put out the U.S. “welcome mat” for European airlines while U.S. airlines remain locked out of Europe’s front door.

Continental is urging the U.S. government to do a deal that has practical value for all U.S. airlines, which already have access to almost any airport in Europe except Heathrow.

Numerous lawmakers have written to the DOT to caution the Department on the approach it has taken in trying to use a rulemaking to recharacterize the U.S. law restricting foreign ownership and control of U.S. airlines.
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