Rod Eddington, chief executive of British Airways and chairman of the Association of European Airlines, is calling on the United States and the European Commission to create a new air treaty that will link the domestic market in the United States with the single market in the European Union.

He is speaking today (Tuesday September 30, 2003) at the Atlantic Bridge conference in Washington on the eve of historic talks to form a new air pact between the United States and Europe. The talks are be the first since the European Commission was given a mandate earlier this year to negotiate on behalf of all European Union member states.
British Airways hopes the talks will pave the way for a ‘common aviation area’ between Europe and the United States that will allow airlines the same freedoms as other business sectors to conduct cross border mergers, acquisitions and joint ventures.

The aviation industry is currently constrained by economic and regulatory agreements that date back to World War 11*.

Mr Eddington said: “It is ironic that international aviation, which by definition facilitates the global trading of other industries, is in itself stuck in a time warp of bilateral agreements.

“We are trapped in our home markets, unable to break out and compete in any markets other than those negotiated for us by the British government. By definition, the majority of these opportunities are for flights into and out of the United Kingdom. There are few meaningful opportunities for us to fly between third countries, and even fewer to fly within them.

“The prize for success in the talks will be considerable - a recent study has estimated that the financial value of the benefits to consumers from such an aviation agreement could be in excess of $5 billion.”

Mr Eddington added: “In more than sixty years the airline industry overall hasn’t earned a penny by way of a return on the considerable capital investment it has required. It has remained fragmented with too many countries inclined to prop up their national airlines when they run out of cash.”

Acknowledging that the old bilateral regime will take time and political will to dismantle, he continued: “Expectations must not be set unrealistically high. We should look at it as a marathon and not a sprint. Of course, it will take political will but what better time could there be to build an agreement that brings Europe and the USA closer together - not just for the airline industry, but all citizens.

“I wish both sets of negotiators all the patience, resolve and perseverance they will need to reach a successful conclusion to their endeavours.”

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