Back in March, transportation officials at the European Union unanimously approved the "Open Skies" agreement, which will liberalize transatlantic air travel, allowing for greater competition between U.S. and European carriers. What's more, many experts believe the agreement may revolutionize the industry, prompting consolidation among European airlines, reducing transatlantic fares, introducing more routes and frequencies and establishing more antitrust immunity among airline alliances.
Come March 2008, when the Open Skies agreement between the
Some of the more exciting points of the treaty allow for
carriers to explore previously unchartered territory, in turn beefing up
competition and travelers' options. For one, the agreement states that European
airlines can operate flights to the
Similarly, experts note that larger carriers may also enter markets until now dominated by smaller European airlines, meaning an airline like Lufthansa could march into TAP Portugal's territory in southern Europe—a move the carrier is currently rumored to be contemplating through the possible acquisition of Spanish airline Spanair.
Pursuing Heathrow Flights
Meanwhile, U.S. airlines were quick to jump on the opportunity to fly in and out of Heathrow, a major gateway city to European cities both large and small, as the agreement calls for such airlines as British Airways and American Airlines to loosen their grips on their protected positions at the airport. Carrier campaigns for U.S.-Heathrow routes already have begun.
Currently, American is taking advantage of its prime real
estate at Heathrow, moving two of its existing flights between
A spokesperson for US Airways echoed that sentiment, stating, "we're looking at Heathrow, but it's way too early to speculate when or if we'll be announcing anything." The Situation
That's not the case for Continental Airlines, which in March
was one of the first to file for permission from the U.S. Department of
Transportation to fly between Houston and Heathrow. As it expands into
Heathrow, Continental said it would retain its existing services to
London/Gatwick from its hubs in
A spokesperson for the airline said gaining access to
Heathrow would allow the carrier to add more routes under existing bilateral
agreements, but declined to disclose exactly where because of competitive
reasons. (As a side note independent of Open Skies, Continental in 2008 begins
Delta Air Lines also is anxious to gain access to Heathrow, which would like to fly between London's busiest airport and Atlanta. "A key focus for Delta has been to obtain meaningful access to London's Heathrow International Airport," said Jerry Grinstein, Delta's CEO, in a March statement. "We welcome an agreement more broadly in European markets, particularly London's Heathrow airport."
Meanwhile, SkyTeam, the alliance Delta is a member of, was
the first this July to file for antitrust immunity under Open Skies, which is
expected to ease regulatory hurdles alliances face under current rules. The
filing asked that SkyTeam's participating carriers—Delta, Air France, Alitalia,
CSA Czech Airlines, KLM Royal Dutch Airlines and Northwest Airlines—be allowed
to cooperate in various operational areas, such as codesharing, frequent flyer
programs and route and schedule planning. SkyTeam also filed for antitrust
immunity with the Department of Transportation in 2005, but eventually withdrew
its application. A short while later, the Oneworld alliance, which includes
Oneworld member Northwest also plans to compete for access
to Heathrow. The carrier in the last year has launched an aggressive European
expansion plan that includes service to
Though a Northwest spokesperson declined to detail expansion
plans, the carrier's recent moves in the market may be a sign of things to
come. In January, the airline launched what it claims is the first and only
nonstop service between
Also beefing up competition and helping to lower fares is
the entrance of a handful of Europe's roughly 25 low-cost and low-fare carriers
that are taking steps to make affordable flights to
European carriers like Eurofly, Flyglobespan and LTU are
increasing flight services between Europe and large
Through November 13, Eurofly is operating nonstop flights
from JFK to
In May, Scotland-based Flyglobespan began daily service
Germany-based LTU International Airlines operates direct
LTU will start operating new service from Melbourne, FL to Berlin's Tegel airport on November 3, says Pierre de la Motte, a spokesperson for the airline. In addition, some services are transitioning from seasonal to year-round, mainly due to demand from business travelers. "We come from more of a holiday background and now we are looking at business travelers more and more," de la Motte says, adding that the airline plans to increase its number of business class seats from 18 to 30. "That is the reason we have been changing our whole business model." Further U.S. expansion plans are in the works, he notes, but details were not ready for discussion at press time.
If one had the time and the perseverance, charting these potential pairings opens up a bevy of new destinations to sell—though it only seems come March 2008 will we know the true potential Open Skies has bestowed on the travel community. Stay tuned.