U.S.-UK Air Services Talks Hinge On Foreign Ownership Provisions

Mar 23, 2018 | News

Aviation Daily
Mar 23, 2018
Victoria Moores

LONDON—Airlines for America (A4A) CEO Nick Calio believes there will be further progress in UK-U.S. air services talks by April, as the UK prepares to exit from the European Union (Brexit) next year.

Speaking at UATP’s Airline Distribution 2018 event here, Calio said negotiators are planning to meet again soon and prospects for a deal are positive.

“The political will on the UK side and the U.S. side is very significant to get something done,” Calio said. “I think probably, hopefully, by the beginning of April you’ll see something happen there.”

He noted that U.S. transportation secretary Elaine Chao and UK secretary of state for transport Chris Grayling are both personally involved in the talks.

With the UK slated to exit the European Union (EU) in April 2019, the U.S. and UK are working on a new air services accord since the UK will no longer be a part of the U.S.-EU Open Skies agreement.

Should the two sides not reach an agreement before Brexit, a fallback option would be the very restrictive Bermuda II agreement that severely limits U.S. carriers’ access to London Heathrow Airport.

A sticking point in talks are the reported inclusion of a legacy ownership and control clause requiring UK-based airlines flying to the U.S. to be majority-owned by UK investors. London-based carriers British Airways, Norwegian Air UK and Virgin Atlantic all fall short of that criteria.

Calio acknowledged the current draft text had foreign ownership and control provisions in it. “We recognize it’s a problem—the negotiators do—and they’re working hard to work it out,” he said.

The EU-U.S. Open Skies treaty allows UK carriers to operate from any point in the EU to the U.S.

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