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European Union; United States: Conclusion of Second Stage of Air Transport (“Open Skies”) Agreement

(Apr. 21, 2010) Since May 2008, two months after the first-stage of the Open Skies Agreement came into effect, the European Union and the United States have been engaged in seven rounds of negotiations on a second-phase air transport agreement. Finally, on March 25, 2010, the two parties concluded a preliminary second-phase agreement.

While it builds upon the groundwork established by the first agreement, this second agreement aims to resolve several critical issues. For example, the prior rules on airline investment were altered in order to make it easier for investors to invest in European or U.S. airlines and to expand consumer choice by further liberalizing market access. The two parties also made considerable progress in several other key areas by agreeing to:

a) augment cooperation on environmental issues by encouraging green technologies, fostering fuel and air traffic management, requiring compatibility of emission trading schemes, and increasing transparency on measures taken to reduce noise;

b) improve the social dimension of EU-US aviation relations by securing the existing legal rights of airline employees and ensuring that the agreement safeguards high labor standards;

c) ameliorate cooperation on security matters between the two parties through the promotion of confidence in each other's security measures and coordination of responses to new threats; and

d) expand the role of the EU-US Joint Committee established by the first-stage agreement to oversee the agreement's implementation and reduce red tape through the mutual recognition of each party's decisions. (Press Release, II/10/371, Breakthrough in EU-US Second Stage Open Skies Negotiations: Vice-President Kallas Welcomes Draft Agreement (Mar. 26, 2010), RAPID, available at

The first stage of the Open Skies Agreement, which replaced the existing individual agreements between the EU Member States and the United States, liberalized the once closed air transport market for EU and U.S. air carriers that wished to fly between and in the United States and the European Union. The long-term objectives of the agreement are to promote competition, contribute to the creation of jobs, and benefit consumers by lowering air fares. The positive effects of the agreement have already been felt, because the total number of flights between the EU and the United States between April and June 2008 was 8% higher than during the same period in 2007. Other major highlights of the initial agreement include provisions allowing:

· recognition by the United States of all European air carriers as European Community air carriers and of the freedom of any Community air carrier to fly from any city in the EU to any city in the U.S., with no restrictions imposed;

· operation of continuing flights from any city in the U.S. to other countries;

· operation of all cargo flights between the U.S. and any third country with no condition that the service has to begin or end in the EU;

· freedom of flight between the U.S. and non-EU countries;

· limitation of access rights to the U.S. “Fly America” program for the transport of passengers and cargo sponsored by the U.S. government; and

· entering into of commercial agreements on code sharing and leasing with third-party airlines.

(Press Release, No. 26/08, European Union Delegation to the United States of America, EU-US Open Skies: A New Era in Transatlantic Aviation Starts on Sunday (Mar. 28, 2008), available at; see also Theresa Papademetriou, New Rules on Air Safety Proposed, GLOBAL LEGAL MONITOR, Apr. 2, 2010, available at