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Open Skies - The Open Aviation Area Donal Lamont This presentation will probably involve audience discussion, which will create action items. Use PowerPoint.

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Presentation on theme: "Open Skies - The Open Aviation Area Donal Lamont This presentation will probably involve audience discussion, which will create action items. Use PowerPoint."— Presentation transcript:

1 Open Skies - The Open Aviation Area Donal Lamont This presentation will probably involve audience discussion, which will create action items. Use PowerPoint to keep track of these action items during your presentation In Slide Show, click on the right mouse button Select “Meeting Minder” Select the “Action Items” tab Type in action items as they come up Click OK to dismiss this box This will automatically create an Action Item slide at the end of your presentation with your points entered.

2 Current Status 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. 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. 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. 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. IALPA supports Open Skies and looks forward to its members benefiting from the opportunities that the new policy shall bring for Irish airlines.

3 Open Skies – Talks to Date October 1& 2 – Opening Positions October 1& 2 – Opening Positions Focus – Prompt exploration by each side of possibility of Reaching Agreement Focus – Prompt exploration by each side of possibility of Reaching Agreement Deregulation ensures growth Deregulation ensures growth

4 Progress Aer Lingus operates to JFK/BOS/ORD/LAX & BWI – the latter under the “Cities Programme” 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 bi- lateral. 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 bi- lateral. No negotiations occurred – then the direct E.U./U.S. negotiations started. No negotiations occurred – then the direct E.U./U.S. negotiations started.

5 Background & Context “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!) “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) “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..” “..never underestimate protectionism, among governments and airlines who oppose change and wish to maintain privileged positions..”

6 Potential Outcomes New “Air Services Agreement” – not a set of new Bi-Laterals New “Air Services Agreement” – not a set of new Bi-Laterals Full access to markets of other side – including right of establishment Full access to markets of other side – including right of establishment Conflicts – needing resolution Conflicts – needing resolution “CRAF” & “Fly America (Europe)” Policies “CRAF” & “Fly America (Europe)” Policies Socio-economic issues – (Labour Issues) – Competitiveness? Socio-economic issues – (Labour Issues) – Competitiveness? Security – a “deal-breaker??” Security – a “deal-breaker??” Cabotage & Wet Leasing Cabotage & Wet Leasing

7 Principal Issues Issues to be Resolved – Issues to be Resolved – 1. Scope of an E.U./U.S. Agreement (Geography, Scheduled/Charter, EEA/Switzerland & Implementation) 2. Commercial Issues (Ownership/Control, Market Access, Ops Flexibility, Pricing, Code-sharing, Leasing, User Charges, Ground Handling, CRS, Intermodal Ops & Government Procurement) 3. Framework Issues (Licencing & Designation, Safety, Security, Competition, State Aids, Environment, Social Implications, Dispute Resolution, Consumer Protection, Customs Duties, Statistics & Consolidated Text).

8 Threats & Risks Assumption of Open Aviation Area Assumption of Open Aviation Area As U.K. & Ireland are major markets, Alliance focus inevitable As U.K. & Ireland are major markets, Alliance focus inevitable STAR & Skyteam enter main markets (JFK/ORD) STAR & Skyteam enter main markets (JFK/ORD) Low-cost U.S. airlines (Southwest, jetBlue, Song, American Transair) Low-cost U.S. airlines (Southwest, jetBlue, Song, American Transair) Aer Lingus greatly disadvantaged by current Bi-Lateral Agreement Aer Lingus greatly disadvantaged by current Bi-Lateral Agreement Shannon – a Special Case? Shannon – a Special Case?

9 The “Low-Cost” Industry Domestic Deregulation (1978) – the impetus for Southwest et al Domestic Deregulation (1978) – the impetus for Southwest et al Extension of U.S. “Low-cost” operations to coast-to-coast routes Extension of U.S. “Low-cost” operations to coast-to-coast routes Southwest (BWI-LAX) & jetBlue (JFK-LGB) Southwest (BWI-LAX) & jetBlue (JFK-LGB) B ; A320 & B757 – Capable A/C B ; A320 & B757 – Capable A/C Cruising speed – 4% slower than A330 – 10 minutes on JFK-Cork flight Cruising speed – 4% slower than A330 – 10 minutes on JFK-Cork flight OAA would open transatlantic markets to all U.S. Airlines OAA would open transatlantic markets to all U.S. Airlines Market also opens to easyJet & Ryanair Market also opens to easyJet & Ryanair

10 OAA Opportunities IALPA depends on successful airline strategies in OAA Environment IALPA depends on successful airline strategies in OAA Environment Pilots are efficient, productive & flexible Pilots are efficient, productive & flexible Aer Lingus brand very strong in U.S. – limited by current Bi-Lateral Aer Lingus brand very strong in U.S. – limited by current Bi-Lateral New markets in Florida, California, South, North-west & North-east US New markets in Florida, California, South, North-west & North-east US Access to Broader EU/US Markets Access to Broader EU/US Markets

11 Key Goals OAA – Essential if Ireland/US Business is to grow OAA – Essential if Ireland/US Business is to grow Tourism & Industry to Benefit Tourism & Industry to Benefit Cabotage – Essential for EU Airlines to balance US Opportunities in Europe Cabotage – Essential for EU Airlines to balance US Opportunities in Europe Win/Win/Win– IALPA & Aer Lingus & Ireland Inc. Win/Win/Win– IALPA & Aer Lingus & Ireland Inc.


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