EU/US : OPEN SKY TALKS RESUME AS CLOCK BEGINS TO TICK.

• Position: International Air Transport Association

The sixth round of negotiations to further liberalise transatlantic air services takes place in Washington on 11-13 January. The EU is pushing the United States to give European airlines greater opportunities to invest in US carriers. A top priority for Washington is to prevent the emergence of new restrictions on night flights in European airports. The talks for a second Open Sky agreement, building on the one signed in April 2007, were launched in May 2008. The clock is beginning to tick: if they do not reach a deal by November 2010, either side - including an individual EU member state - can revoke the flying rights granted under the 2007 agreement.a

The US lead negotiator will continue to be John Byerly, deputy assistant secretary for transportation affairs at the US State Department. Byerly has held this post since 2001. As his position is politically-appointed, he could have been replaced by the Obama administration but, after months of uncertainty, it now appears he will stay. On the EU side, the key negotiator remains Daniel Calleja, director of air transport at the European Commission. However, there will be changes higher up the line: Antonio Tajani, outgoing EU transport commissioner, is likely to be replaced in February by Siim Kallas, current commissioner for administrative affairs. The Spanish EU Presidency will be closely involved in the dossier during its January-June 2010 tenure.a

The biggest obstacle the EU faces in its ownership/investment liberalisation push is not the US administration but the Congress. US lawmakers look unlikely to change a long-standing law that effectively prevents a US airline from being taken over by a European one. Indeed, Congress is currently considering a bill that could further tighten these restrictions, and require US government officials to inspect European aircraft repair stations. This Federal Aviation Administration bill had threatened to scupper the Open Sky talks entirely. However, EU officials are encouraged by the latest draft adopted by the Senate Commerce Committee, on 29 September 2009, as it does not contain the offending clauses on ownership and repair stations.

Tough time for industry

The economic outlook for the aviation industry remains gloomy. The International Air Transport Association (IATA), which represents most of the world's carriers, has announced projected losses of US$5.6 billion for 2010, following up on losses of US$11 billion in 2009. European carriers are...