EU TRANSPORT chief Jacques Barrot has said the Republic is one of the best-placed European states to benefit from the Open Skies deal with the US, which takes effect from tomorrow.
He has also warned the US that it will face retaliatory sanctions from the EU unless it agrees to relax restrictions on foreign ownership of its airlines under a second-stage agreement.
"If there is no movement or progress by 2010 then we would have to think about withholding some rights from US carriers. We could restrict their cargo rights, which is very important for the US because of big companies such as FedEx and UPS," said Mr Barrot, who clinched the first Open Skies deal last year after several years of tough negotiations.
This EU-US aviation agreement removes decades of regulation that prevented most airlines from directly serving airports in Europe or the US. Open Skies replaces 21 separate bilateral aviation agreements between EU states and the US and means that European carriers no longer have to start US-bound flights from their home state.
"We think that the economic benefit of open skies will be somewhere in the region of several billion euro per year," Mr Barrot told The Irish Times on the eve of the agreement taking effect. "Heathrow airport will see an increase in the frequency of flights to the US of up to 20 per cent, in Spain we will see an increase of 15 per cent while overall across Europe the number of transatlantic flights will rise 8 per cent."
Mr Barrot said that the Republic was one of the best-placed European states to benefit from the open skies deal. "Already Aer Lingus has developed new routes through its transitional Open Skies deal agreed last year to San Francisco, Philadelphia and Orlando. The result of Open Skies is that the frequency of flights between Ireland and the US goes up from 119 per week to 146 per week," said Mr Barrot.
The European Commission estimates that consumers will benefit from up to €12 billion in savings within the first five years of the deal coming into effect. It should also boost transatlantic passenger numbers from 50 million to 75 million and create up to 80,000 new jobs on both sides of the Atlantic, according to its studies.
Some aviation analysts say these forecasts are overly optimistic, although all agree there should be an increase in flight frequencies.
But Mr Barrot said the EU would continue to insist that the US agree a second-stage Open Skies agreement to enable EU carriers to invest in and take control of US airlines. The US refused to cede these rights initially citing security, thus provoking an angry response from big European carriers such as British Airways.
"The argument that there are security concerns is not well founded. It is basically a cover for the anxiety of US carriers, who fear competition," said Mr Barrot.
Talks on a second-stage deal begin on 15th May.
Mr Barrot said he hoped new low-cost operators would begin operating transatlantic routes. But he refused to speculate on whether Ryanair, which recently accused the Commissioner of "corruption" over its state aid investigations into the firm's deals with certain EU airports, would be well-placed to begin operating these types of transatlantic flights.
"Its not for me to say," said Mr Barrot, who recently met Michael O'Leary in Brussels for talks about Ryanair's relations with the EU.
"He wrote to me and I received him here and I told him we were obliged to investigate complaints otherwise we should be condemned by the European court of justice for inaction," he said.
"We don't want to make his task any more difficult because he is paying a considerable service to Europe . . . What I did promise to the chairman of Ryanair was a more sustained dialogue."
And what was the reaction of Mr O'Leary to him?
"He told me I was an intelligent and understanding commissioner but I wasn't surrounded by good staff . . . He charms and he beats you at the same time. He condemns all rules while forgetting that some rules are actually favourable to him," said Mr Barrot.
