Lifting of US airline ownership rules welcomed by Bmi

US Department of Transportation proposals towards liberalisation of foreign ownership of US airlines have been welcomed by Bmi.

The UK carrier said the proposal, as reported by TravelMole, went a long way to satisfying the market access requirements being considered by the EU as part of open skies negotiations with the US.

It would allow greater effective control of US carriers in important economic areas such as marketing, pricing, route development and aircraft acquisition, Bmi said.

Substantial progress was made during the last round of talks held in Brussels in October. While there are still issues to be resolved, both sides have indicated that the basis of an agreement is in sight, according to the UK airline.

CEO Nigel Turner said: “We need to study the details, but our initial analysis is that the offer is both significant and wide-ranging. 

“It will lift the lid on foreign investment in US airlines and provide for effective economic control by those interests. At the same time, effective safety oversight, security and defence issues remain with US citizens.

“The ownership and control issue is only one of many on the table for the EU and US negotiators. We believe that all these issues need to be considered as part of a balanced deal. Today’s US proposal is, nevertheless, an important step.

“We look to the European Commission and the UK Government to respond positively.

“I have asked for an urgent meeting with transport secretary Alistair Darling to discuss the next steps in the EU-US negotiations. We urge the UK Government to resist knee-jerk reactions from those parties protected by the illegal Bermuda II agreement.

“Our competitors have, for years, benefited from the state aid accorded by Bermuda II. Bermuda II is now on life support. Few will mourn its passing.”

Meanwhile, Virgin Atlantic chief executive Steve Ridgway encouraged the EU not to give in to the US in the forthcoming EU/US aviation talks.

He said: “What the US Department of Transportation’s proposal on international investment in US airlines really means is not clear but it appears that they are trying to secure access to Heathrow for their airlines (in the forthcoming EU/US talks) while giving little or nothing in return. 

“Their proposal would leave in place the fundamental restrictions on foreign companies investing in or controlling US airlines.

“This is a transparent device to fool the EU into agreeing to an imbalanced deal. For example, when EU/US talks resume soon the US Government will be asking for the right for American airlines to fly in to Heathrow and within Europe and yet it will continue to refuse to allow European airlines to fly within the United States.

“Virgin Atlantic believes in more competition but the only deal worth negotiating is a true Open Aviation Agreement which removes all the regulations which distort our industry. This would be a balanced deal giving both sides everything they want and leaving the consumer the winner, with more services and cheaper fares within a combined US and EU aviation area.

“In simple terms, the EU must not trade access to Heathrow – its most valuable asset – for anything less than a true Open Aviation Agreement.  Each side has a number of cards in its hand but the EU holds the Ace and it should only play it to end the game.”

Report by Phil Davies