Wednesday, January 16, 2008

IALI In the News

Professor Brian Havel, Director of the International Aviation Law Institute at DePaul College of Law, was featured in the January 16, 2008 edition of the Chicago Tribune.  In a story covering the "'serious' talks" between United Airlines and Delta about a merger, Professor Havel noted the limited prospects for generating additional capital from foreign airlines and the close scrutiny any foreign investment to finance the deal would attract.

January 16, 2008 | Permalink | Comments (0) | TrackBack (0)

Friday, January 11, 2008

British Airways to Launch OpenSkies

This coming March, the historic U.S./EU Air Services Agreement, dubbed "Open Skies," will go into effect. Since its signing last year, industry watchdogs, academics, and various interest groups have chimed-in on what its ultimate impact will be. Concerns over the Agreement's establishment of a timetable for negotiations coupled with a list of hotly-contested agenda items has animated some of the more substantial discussions about the merits and future prospects of the Agreement. In the meantime, British Airways has opted to waste no time in taking advantage of the Agreement's opening of flight routes between the United States and Europe to both sides' respective air carriers. Starting in June, OpenSkies-a new airline owned and operated by British Airways-will begin offering service from New York to either Brussels or Paris. It won't be for everybody, however.

According to a brief report by Aviation Week, the Boeing 757 aircraft which will be used to fly the route will feature a three-class seating configuration with economy comprising a mere 30 of the expected 82 seats.  The 24 business-class seats will convert into six-foot long flat beds, while the 28 premium economy seats will feature a 52-inch pitch. This plan deviates from earlier speculation that British Airways would add an all-business class flight on the transatlantic route. The airline's Chief Executive, Willie Walsh, admitted to The Guardian that such a venture would simply not be sustainable outside of Heathrow and that OpenSkies is intended to "complement rather than compete" with the airline's longstanding Heathrow services.

Naturally, announcement of the new venture has been met with some criticism.  Paul Charles, Director of Communications for Virgin Atlantic, remarked: "[OpenSkies] is clearly different from what they planned and it has no permission to fly into New York's JFK airport. BA will have to give up current services so it can fly into JFK." This may mean that the new airline will be forced to use Newark Airport for its hub. On the labor end of things, the head of the pilots' union noted that while it "welcomes BA's decision to innovate and establish a wholly owned subsidiary company to take advantage of the new open skies agreement between the USA and EU but we have issues with BA on how the new service should be structured."

When OpenSkies launches in June, it will initially operate with a lone aircraft before seeing an additional one added before the close of 2008.  British Airways is hopeful that OpenSkies will have four aircraft total by 2009 with the possible additions of Amsterdam, Frankfurt, Madrid, Milan, Zurich, and Geneva to its list of European destinations.  Doing so will enter it into tight competition with veteran carriers such as United Airlines and American Airlines in the U.S. and European carriers such as Lufthansa and Air France-KLM. Even so, Walsh is optimistic about the new airline's prospects and the role of British Airways in the future of air transport between the U.S. and Europe: "By naming the airline OpenSkies, we're celebrating the first major step in 60 years towards a liberalised US/EU aviation market which means we can fly between any US and EU destination. It also signals our determination to lobby for further liberalisation in this market when talks between the EU and US take place later this year."

January 11, 2008 | Permalink | Comments (0) | TrackBack (0)