Eight EU Member States Broke Law With US ‘Open Skies’ Deals, Court Rules

01 February 2002

Air service agreements between eight member states and the United States government contravened European Union law, found the European Court of Justice in a preliminary ruling on Thursday.

Such agreements contain a nationality clause allowing only an airline from the signatory countries to use those rights, thereby "infringing the Community principle of freedom of establishment” – a principle that permits a company from any part of the EU to set-up operations in any other member state.

Although the finding by advocate general Antonio Tizzano is non-binding, the final decision reached by a panel of judges – due later this year – usually ratifies the advocate general’s ruling.

Such ratification will transfer power to enter into bilateral deals with the US from individual member states to the European Commission, at the same time providing a much needed shake-up of the antediluvian rules dating back to the 1940s that govern worldwide aviation.

The EC initiated the case three years ago, after the governments of Austria, Belgium, Denmark, Finland, Germany, Luxembourg and Sweden entered into so-called ‘open skies’ deals with the US. It also indicted the UK for its highly restrictive bilateral accord with Washington.

Thursday's ruling is likely to result in an immediate freeze on further ‘open skies’ negotiations between the UK and US, currently suspended in an on-again-off-again loop following Britain’s flounce-out in protest at the conditions imposed by Washington on British Airways hoped-for alliance with American Airlines [WAMN: 28-Jan-02].

The UK government blusters that its sovereign negotiating rights remain until the final ruling by the European court. Privately, however, British officials concede that their freedom to act is effectively blocked by the advocate-general's decision.

News source: Financial Times