Transcript Open Skies - The Open Aviation Area

Open Skies - The Open
Aviation Area
Donal Lamont
Current Status
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All Aer Lingus pilots are represented by IALPA;
and Aer Lingus is Ireland’s only designated airline
under the current Ireland/U.S. Bi-lateral.
IALPA was instrumental in effecting the policy
change that, in 1994, allowed an equal number of
non-stop flights from Dublin and Shannon.
The new policy saved Aer Lingus from failure –
and ensured the continuation of direct services
between Ireland & the United States.
IALPA supports Open Skies and looks forward to
its members benefiting from the opportunities
that the new policy shall bring for Irish airlines.
Open Skies – Talks to Date
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October 1& 2 – Opening Positions
Focus – Prompt exploration by each
side of possibility of Reaching
Agreement
Deregulation ensures growth
Progress
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Aer Lingus operates to JFK/BOS/ORD/LAX
& BWI – the latter under the “Cities
Programme”
Aer Lingus had indicated that it intended
to open a number of new routes to the
U.S. - if any improvement in access were
to be negotiated under the existing bilateral.
No negotiations occurred – then the direct
E.U./U.S. negotiations started.
Background & Context
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“Transportation activities increasingly competitive
due to technology; demographics & other
structural
changes;
Competition
makes
Government Regulation increasingly cumbersome
and outdated so the regulation impedes rational
allocation of resources” (Harvard analysis –
1959!)
“Historic opportunity to build on framework of
existing agreements with the goal of opening
access to markets and maximizing the benefits to
consumers, airline and communities on both
sides of the Atlantic” (Opening comments – US)
“..never underestimate protectionism, among
governments and airlines who oppose change
and wish to maintain privileged positions..”
Potential Outcomes
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New “Air Services Agreement” – not a set
of new Bi-Laterals
Full access to markets of other side –
including right of establishment
Conflicts – needing resolution
“CRAF” & “Fly America (Europe)” Policies
Socio-economic issues – (Labour Issues) –
Competitiveness?
Security – a “deal-breaker??”
Cabotage & Wet Leasing
Principal Issues
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Issues to be Resolved –
Scope of an E.U./U.S. Agreement (Geography,
Scheduled/Charter, EEA/Switzerland &
Implementation)
Commercial Issues (Ownership/Control, Market
Access, Ops Flexibility, Pricing, Code-sharing,
Leasing, User Charges, Ground Handling, CRS,
Intermodal Ops & Government Procurement)
Framework Issues (Licencing & Designation,
Safety, Security, Competition, State Aids,
Environment,
Social
Implications,
Dispute
Resolution,
Consumer
Protection,
Customs
Duties, Statistics & Consolidated Text).
Threats & Risks
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Assumption of Open Aviation Area
As U.K. & Ireland are major markets,
Alliance focus inevitable
STAR & Skyteam enter main markets
(JFK/ORD)
Low-cost U.S. airlines
(Southwest,
jetBlue, Song, American Transair)
Aer Lingus greatly disadvantaged by
current Bi-Lateral Agreement
Shannon – a Special Case?
The “Low-Cost” Industry
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Domestic Deregulation (1978) – the
impetus for Southwest et al
Extension of U.S. “Low-cost” operations to
coast-to-coast routes
Southwest (BWI-LAX) & jetBlue (JFK-LGB)
B737-700; A320 & B757 – Capable A/C
Cruising speed – 4% slower than A330 –
10 minutes on JFK-Cork flight
OAA would open transatlantic markets to
all U.S. Airlines
Market also opens to easyJet & Ryanair
OAA Opportunities
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IALPA depends on successful airline
strategies in OAA Environment
Pilots are efficient, productive &
flexible
Aer Lingus brand very strong in U.S.
– limited by current Bi-Lateral
New markets in Florida, California,
South, North-west & North-east US
Access to Broader EU/US Markets
Key Goals
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OAA – Essential if Ireland/US
Business is to grow
Tourism & Industry to Benefit
Cabotage – Essential for EU Airlines
to balance US Opportunities in
Europe
Win/Win/Win– IALPA & Aer Lingus &
Ireland Inc.