John Brantley Airport Director

A Look Ahead at International Travel
Editorial

At the United States/European Union Summit on April 30, a newly negotiated agreement covering air services between the U.S. and the 27 states of the European Union is expected to be signed. For the first time since the 1944 Convention on International Civil Aviation in Chicago, an international air service agreement to which the U.S. is a party will apply to more than one country and equally to each of those countries.

While the new agreement won’t become fully effective until March 30, 2008, a special provision has allowed the Irish carrier Aer Lingus to already receive approval to extend its U.S. gateways from four to seven later this year. Similarly, U.S. carriers Delta and Continental are expected to soon seek to begin service next year from the U.S. to London’s Heathrow Airport, from which they have excluded by the old U.S./U.K. bilateral.  Other airlines are rushing to take advantage of new opportunities that are now available. Indeed, it seems that a new day is dawning in international air transportation.

Why is this new agreement important? Because ultimately it will lead to international air transportation becoming like domestic services in the U.S. — economically deregulated — allowing any airline to fly where it chooses, when it chooses, at any price to the customer it chooses, and to compete with other carriers anywhere in the world.  Increased competition brings more services and lower prices, which is good for consumers and stimulates visitation and trade. The Triangle region has benefited greatly since 1978 from airline deregulation in the U.S., and it will benefit even more from deregulation of international air transportation.

The path forward is not without many hurdles, however. One of those is the insistence of the Congress that U.S. resident airlines must be 75% or more owned and controlled by U.S. citizens and that non-U.S. resident airlines can’t carry local passengers between points in the U.S. This thinking, which generally isn’t applied to other U.S. resident businesses, is an obstacle to expanding international air service to and from the U.S.

In the discussions beginning next year of a second stage air service agreement between the U.S. and the E.U., the E.U. will press hard to eliminate these restrictions. If that doesn’t happen, the E.U. may exercise its ability to void the agreement to be signed on April 30. That would create chaos with respect to air service between the U.S. and Europe, but the E.U. appears determined to truly open the skies between it and the U.S.  It’s hard to imagine a worse outcome if that comes about, which will adversely affect RDU’s efforts to gain a second European nonstop flight. The opportunity is there now, but the bridge across the water must remain standing in order for it to happen. Stay tuned as this very important issue unfolds.

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