Aer Lingus has confirmed that it will begin services to three new cities in the US before the end of the year.

[ Sunday, 25th March 2007 ]

Aer Lingus has confirmed that it will begin services to three new cities in the US before the end of the year.

This follows news that EU transport ministers have unanimously backed an agreement with the US to throw open transatlantic air travel to more competition.

But the 27 ministers, at Britain's request, sought a five-month delay in implementing the deal so it would take effect in March 2008 instead of October this year.

AdvertisementThe 'open skies' agreement will allow EU airlines to fly from any city in the union to any city in the US and vice versa. The deal will also end the Shannon stopover.

The three new Aer Lingus routes are to San Francisco, Orlando and Washington, with the San Francisco service expected to start in October.

Britain had sought concessions for London's Heathrow Airport, Europe's busiest hub, and some firm assurance that the US would in future allow foreign airlines to own and control US carriers.

Proponents say the deal will boost competition, increase flight frequencies, reduce fares and create jobs on both sides of the Atlantic. But Britain was reluctant to lift restrictions at Heathrow, which favour British Airways and Virgin Atlantic, without more rights to invest in US carriers.

US rules limit foreign investment in US carriers to 25% of voting rights, whereas US companies can control up to 49% of EU carriers - a key sticking point for Europe. The new deal would give European companies the right to own more than 50% of non-voting equity in US carriers and allow the EU to limit US investment in EU airlines to 25% of voting shares.

Ryanair said the deal will deliver more competition, choice and lower fares for consumers and it called on the EU to use this opportunity to apply the benefits of deregulation to airports too.

'In Ireland, consumers are still paying for an absence of competition in this sector, which is bedevilled by protected monopoly airports', the airline said.

The Irish Hotels Federation said the Open Skies decision could mean an extra one million US visitors to Ireland annually over the next seven years, and an extra €1 billion euro revenue to the Irish economy.

The Dublin Airport Authority said the decision lends even greater urgency to the need to complete its new passenger terminal within the next three years, and a new runway, in order to manage the additional long-haul traffic.

British Airways CEO Mr Willie Walsh said while BA had no extensive plans to get involved in the US domestic market, it might look at running services from New York to the west coast of America.

Kevin Thompstone, CEO, Shannon Development, said the roll out of key infrastructural projects in the Shannon Airport catchment area is now more critical than ever.

He said it is vital the West is strongly branded and promoted in North America and other key markets.