Air analysts said the EU-US Open Skies deal may not lead to the predicted cuts in transatlantic fares
Darryl Jenkins, director of the Aviation Institute at Ohio State University said the deal would increase transatlantic traffic so there would be no “downward pressure” on fares.
Mr Jenkins, speaking at the National Business Travel Association's Business Travel Financial Forum in New York, predicted business class fares would “stay the same.”
Chris Avery, a London analyst with JP Morgan, a US investor bank, was quoted in the Financial Times as saying: “We do not anticipate an immediate fare war.”
He said that predictions were based on cuts in the “rack rate” which few corporates, with their airlines deals, ever actually paid.
Mr Avery added that: “Despite popular perception, Heathrow/US fares are competitive. We saw a £200 all-in round-trip fare Heathrow/New York recently on ba.com.”
The deal, approved both by the council of EC transport minsiters in Brussels last week and by the Bush administration this week, will partially liberate the transatlantic skies.
EU airlines will be able to fly from any EU airport to any city in the US while US airlines will be free to fly to any EU airport and within the European Single Skies area.
Basically the deal in theory opens up the Heathrow-US route which has been restricted to four carriers, BA, Virgin Atlantic, American Airlines and united Airlines, providing newcomers have or can buy slots.
The agreement comes into force in March, 2008 and will be followed by a second stage of talks aimed at relaxing US rules on foreign airline ownership and on entry to its domestic market.
Bmi, one of the foremost supports of the deal and a leading forecaster of lower fares, said it would scrap some of its existing short haul routes to fly transatlantic services from its Heathrow slots.
BA has also said it will move three American routes to Houston, Dallas and Austin from Gatwick to Heathrow.