Benefits such as the promise of increased competition and lower fares could have repercussions as far as climate change is concerned. Colin Ellson investigates Two seemingly unrelated events in 2007 illustrated the sometimes hostile, sometimes harmonious, but usually controversial relationship between the bureaucrats of Brussels and the White House. In December, the European Union and the US argued long and hard at the UN global conference on climate change in Bali over whether targets should be set for carbon emissions. The US maintained goals would harm its car-orientated economy, largely dependent on the oil and motor industries, Europe that there should be a binding reduction of 25% to 40% below 1990 levels by 2020. Finally, a compromise "road map" deal was reached that sets an agenda for negotiators to hammer out a comprehensive strategy to combat global warming by 2009. There was no such stand off in April last year, when the US and the EU shook hands warmly after negotiating an ‘open skies’ agreement which will allow any European or American airline to fly any route between any city in the EU and any city in the US. European carriers will not, however, be allowed to fly domestic services in the US, although Virgin Atlantic has already launched Virgin America under strict laws on the percentage of foreign ownership allowed. Coming into force at the end of March, the open skies agreement will fundamentally affect London Heathrow, the world's busiest international airport, with onward access to the capital's dominant business and financial districts seen as a prize worth the winning. Great potential in theory, then, for carriers to exploit the new policy, but the fact might be somewhat different. At present, the exclusive right to operate transatlantic flights from the UK's premier gateway is held by just British Airways, Virgin Atlantic, United Airlines and American Airlines. Third country carriers, with so-called 5th freedom rights, may also carry passengers between Heathrow and the US, with the privilege exercised by Air New Zealand, Air India and Kuwait Airways. The problem for rivals keen to get a slice of the action is what might be termed a ‘slottery’ – obtaining valuable landing and take-off slots at an airport which, even with the imminent opening of Terminal 5, will still be stretched to the limits. It's a problem, compounded by a lack of runway capacity, shared with gateways across Europe. Demand at Heathrow far outstrips supply. Incumbent airlines claim "grandfather rights" over 97% of all slots, with BA holding 40% and bmi 12%. And the majority of those left over are at times not suited to transatlantic services. Which means not a little horse trading, with a pair of take-off and landing slots reputedly changing hands for £10 million or so. Meanwhile, in an effort to sort out the situation, the UK's Civil Aviation Authority, among others, has suggested slots should be auctioned to airlines and then traded in a transparent secondary market to encourage better utilisation of the scarce resource. No matter how tough the going, the concept of opening up Heathrow to competition is already bearing fruit. Continental Airlines, Northwest Airlines/ KLM, US Airways, and Delta Air Lines have all announced they will launch transatlantic services this spring. And under a recently signed open skies deal between the UK and Singapore, Singapore Airlines plans to be the first non-EU or US carrier to operate across the pond since the latest accord, although its Airbus A380 super-jumbo service is dependent on obtaining those gold dust slots. While Heathrow is the focus of attention, the prospect of open skies is shaking up the aviation industry across Europe. A number of airlines are considering starting operations from cities other than their home bases, although Virgin Atlantic has postponed its plans to add all-Business flights to New York from centres such as Paris, Frankfurt, Milan, Zurich and Amsterdam. IATA, the International Air Transport Association, warns the open skies policy in Europe will fundamentally change the airline industry, while supporters claim it will increase competition, create up to 80,000 jobs and lead to lower fares. The jury is out on the question of fares. Some believe the market is already highly competitive, others are predicting radical changes. Michael O'Leary, the CEO of Ryanair, for one. "We've been approached by a number of airports in the US keen to see us start a long-haul, low-fare service and we're working on plans to start flying the Atlantic," he said in April last year. If they go ahead, flights could start in 2010, with one-way fares from a ludicrous US$13.30 (€10). Whether open skies in Europe will be able to deliver significantly greater frequencies across the Atlantic and lower fares remains to be seen. What is certain is that it will increase the number of flights, carrying an estimated 26 million extra passengers, and therefore cause a marked rise in greenhouse gas emissions. Here, the two major meetings between Europe and the US in 2007 are on common ground. If open skies will boost global warming on the one hand, the two sides must be in total agreement on how it should be tackled on the other. Who’s new at Heathrow
US Airways: daily to Philadelphia.
Delta Air Lines: double-daily to New York JFK, daily to Atlanta.
Continental Airlines: daily to Houston and New York.
Northwest Airlines/KLM: daily to Detroit, Minneapolis/St Paul, Seattle.
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