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Open Skies - The Open Aviation Area

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

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Open Skies - The Open Aviation Area

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  1. 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. Open Skies - The Open Aviation Area Donal Lamont

  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. • 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. • 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 • Focus – Prompt exploration by each side of possibility of Reaching Agreement • Deregulation ensures growth

  4. Progress • 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. • 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demographics & other structural changes; Competition makes Government Regulation increasingly cumbersome and outdated so the regulation impedes rational allocation of resources” (Harvard analysis – 1959!) • “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..”

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

  7. Principal Issues • Issues to be Resolved – • Scope of an E.U./U.S. Agreement (Geography, Scheduled/Charter, EEA/Switzerland & Implementation) • Commercial Issues (Ownership/Control, Market Access, Ops Flexibility, Pricing, Code-sharing, Leasing, User Charges, Ground Handling, CRS, Intermodal Ops & Government Procurement) • 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 • As U.K. & Ireland are major markets, Alliance focus inevitable • STAR & Skyteam enter main markets (JFK/ORD) • Low-cost U.S. airlines (Southwest, jetBlue, Song, American Transair) • Aer Lingus greatly disadvantaged by current Bi-Lateral Agreement • Shannon – a Special Case?

  9. The “Low-Cost” Industry • Domestic Deregulation (1978) – the impetus for Southwest et al • Extension of U.S. “Low-cost” operations to coast-to-coast routes • Southwest (BWI-LAX) & jetBlue (JFK-LGB) • B737-700; A320 & B757 – Capable A/C • Cruising speed – 4% slower than A330 – 10 minutes on JFK-Cork flight • OAA would open transatlantic markets to all U.S. Airlines • Market also opens to easyJet & Ryanair

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

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

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