Monday, March 24, 2008

Open Skies

This Sunday -- March 30, 2008 -- the Open Skies agreement between the United States and the European Union will take effect. The liberalization process has been in the works for over 15 years and currently involves more than 120 bilateral agreements. And this one between the U.S. and the E.U. has probably the greatest potential for economic impact. With this agreement, U.S. and E.U. airlines will be able to choose their own routes and set their own fares as they choose. Before Open Skies, scheduled air carriers were subject to any and all restrictions placed on them by the countries to which they flew. Governments of any country allowing international flights were required only to adhere to regulations set forth in the original Chicago Convention, which in 1944 led to the establishment of the International Civil Aviation Organization. The current edition (7MB pdf) of this convention, which Open Skies will augment, provided basic guidelines such as:
  • "The contracting States recognize that every State has complete and exclusive sovereignty over the airspace above its territory."

  • "No state aircraft of a contracting State shall fly over the territory of another State or land thereon without authorization by special agreement or otherwise, and in accordance with terms thereof."

  • "No scheduled international air service may be operated over or into the territory of a contracting State, except with the special permission or other authorization of that State, and in accordance with the terms of such permission or authorization."
It is the purview of Open Skies to allow airlines to fully compete in a free market. Whether or not this will benefit air travelers remains to be seen.

Image: KLM Cargo

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