Saturday, 30 April 2016

US budget flights spat highlights Brexit fares threat

Old Ironsides - USS Constitution in Boston Harbour. Norwegian waste to fly there from Cork
The battle over low cost airline Norwegian's bid to launch cheap trans-atlantic flights operated by an EU based subsidiary provides a timely illustration of the risks travellers face if the UK votes for Brexit. Open skies remain, if you'll pardon a clunky metaphor, a delicate flower. Airlines profess to welcome competition but - as the chair of a UK carrier told me decades ago - they would really love a monopoly. Norway, of course, is not an EU member. But the airline seeks to launch an subsidiary based in Ireland - which is and where labour costs are lower. After dragging its feet for months the Department of Transportation in Washington has given the plan a tentative green light. American unions are up in arms. A bill aimed at blocking Norwegian's project has been introduced in the House of Representatives. The Business Travel Coalition has it back, describing the bill as "another vivid example of why voters are white-hot-mad as Washington and special interests collude to undermine consumers’ interests.” Forget the fact that this is a business travel lobbying organisation. Low fares are low fares whoever pushes for them. What this opaque seeming spat highlights is that whatever the rights and wrongs of employing cheaper labour by flying under flags of convenience, the UK might not get an easy ride outside the EU where civil aviation is concerned. Supposing we are unable to secure an arrangement to remain party to Brussels' Open Skies agreement with Washington after an exit. Vested interests will not just roll over and allow the UK the same rights secured by the EU. Negotiations are likely to be long and tricky with tedious horse trading - and the Americans will inevitably hold the whip hand. Reduced opportunities for new services and competition on routes to and from the UK could mean higher fares. Remember that EU airlines still don't have the right to operate onward flights within the US beyond gateway airports. We should not see the whole, labyrinthine referendum issue solely in terms of leisure travel but with foreign holidays now widely regarded as a right than a luxury, it's worth bearing in mind that Brexit could make them more expensive.

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