New York Hotels Blog

August 27, 2010

Cheaper Flights over the Atlantic? The Open Skies Agreement.

The agreement

Last year, ministers across the EU gave their backing for an agreement that would allow any carrier based in the region to operate flights to the USA, while any carrier registered in America would also be able to run services to destinations across the EU.

One exception to the deal, however, is that EU airlines will not be given carte blanche to run their own domestic routes within the USA.

The pact will now come into force in March and has been praised by many for effectively liberalising the transatlantic aviation market and giving airlines more freedom to operate different flights between the two regions.

According to the Civil Aviation Authority, when the agreement starts, more than 60 per cent of passengers flying on long-haul routes from the UK will be under the jurisdiction of a “liberalised” agreement that does not attempt to constrict the number of international flights carriers can provide.

More than 90 per cent of the UK’s international air travel – including that in the European Common Aviation Area – will take place within the open skies agreement or other open aviation area-type pacts, it says.

A choice selection of cheap flights?

The most obvious advantage of the agreement for UK flyers is that there will be significantly more options to choose from when booking a flight across the Atlantic from Europe – and with more choice comes the possibility of cheaper fares.

“Liberalising the air transport market is good for consumers in bringing prices down and offering more choice,” comments James Fremantle, industry affairs manager at the Air Transport Users Council (AUC).

“There are cheaper air fares because there is more competition. It means that you have more choice of subject and airlines that are doing the routes, which ultimately means cheaper fares.”

A number of carriers have announced plans to launch new routes with effect from the end of March to take advantage of the deal.

Air France, Delta, Continental Airlines, Northwest Airlines and US Airways have all announced their intention to launch various new flights from London to destinations in the USA, while British Airways is poised to go one step further and launch an airline – with the original name of OpenSkies – that will focus on offering flights that it could not provide before the agreement was formed.

“British Airways have already started with their business class-only flight from Paris to New York direct, so that’s another choice for passengers [compared with] what was available previously,” Mr Fremantle explains.

“So it is starting already and I can’t think of anything bad that can come of it from a consumer point of view. It should really open up the market and provide better choice and cheaper fares.”

The Telegraph recently drew up a table comparing the different fares that are likely to be offer between Heathrow Airport and Los Angeles after March 30th this year. Out of the six airlines the newspaper selected, British Airways was found to offer the cheapest fare at £300, while the other prices did not surpass the £399 mark.

A plethora of destinations

So where exactly will passengers be able to fly to once the agreement comes into effect at the end of March? It is likely that there will be a leap in the number of flights being operated to New York, but there will also be extra options for those looking to fly to the likes of Los Angeles, Houston, Washington and more.

Of course, the same is true if you happen to be flying the other way. Round-the-world-trips are still popular among holidaymakers, so the ability to choose from more options when deciding on which airline to fly with when making the jump from Europe to the USA or vice versa is likely to be a strong benefit.

Heathrow troubles?

With Heathrow Airport currently running at full capacity, concerns have been raised that the open skies agreement could pile more pressure on the hub as more new routes are launched – raising the spectre of further delays and baggage issues. However, the AUC’s Mr Fremantle says that Heathrow should be able to increase capacity in tandem with the increase in new flights.

“We have supported extra capacity at Heathrow in general,” he states. “Heathrow’s full; [it is] running to capacity … so nothing more can be done at the moment, but we’ve supported it all the way.

“These two things go together actually; more capacity at Heathrow and open skies. This should create a situation where passengers have more flights and more choices.”

More open skies?

If the EU-USA open skies pact proves to be successful and beneficial for all concerned, we could see similar agreements enacted with other regions, bringing even more flight choice for passengers.

Last November, the Department for Transport announced that the UK government had signed an agreement with that of Singapore that removed all of the remaining restrictions on flights between the two destinations, opening up the aviation market in each country to both nations’ airlines.

Commenting on the deal, transport secretary Ruth Kelly said: “As the most liberal agreement of its kind to date, I hope it will set the standard for other comparable agreements in the future.”

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