12/02/12, 12:13:35 EST

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EU, Canada to Start Talks on Air-Travel Deregulation

bloomberg.com

The European Union will seek to deregulate air travel with Canada, a step that would expand trans-Atlantic competition after an EU-U.S. ``open-skies'' deal.

EU governments gave the go-ahead today for talks on a treaty letting airlines fly to Canada from any airport in the 27-nation bloc. Current rules force EU-based carriers to serve Canada from their home country.

``It's very worthwhile because the trans-Atlantic air market with Canada is still little developed,'' EU Transport Commissioner Jacques Barrot said in Luxembourg, where national ministers endorsed the opening of negotiations. The European Commission, the EU's regulatory arm, will lead the talks with the Canadian government and any accord would need the approval of ministers in Europe.

The EU is opening international airline markets after its high court struck down aviation agreements between individual European nations and other countries. The European Court of Justice said in 2002 that the nationality-based route restrictions in these accords violate rules making the EU a single market.

Six months ago, after four years of negotiations, transport ministers in the EU approved a treaty with the U.S. opening trans-Atlantic air routes starting in March 2008. The U.K., with about 40 percent of the market and veto power over the deal, lifted its opposition after the U.S. committed to future talks on opening the domestic market to European carriers.

`Good News'

The Canadian government called the EU decision to seek a second trans-Atlantic aviation accord ``good news'' and said preparations are under way for the talks.

``We are looking to conclude an agreement in a timely fashion,'' Canadian Transport Minister Lawrence Cannon said in an e-mailed statement from Ottawa. ``For travelers, this means more choices in terms of destinations, flights and routes.''

An open-skies agreement between the EU and Canada would lower fares and increase the annual number of air travelers between the two regions from about 8.5 million to 12 million within five years of a deal, according to the Brussels-based commission. An accord would also generate economic benefits of as much as 178 million euros ($252 million) and could create 3,700 jobs in the first year, said the commission.

In addition to ending route protection, the commission aims to align regulatory standards in areas such as competition and security in any treaty with Canada.

 Printable Version  | published Oct 02, 2007