EU and U.S. Close to Deal over Reciprocal Wet-lease Terms

 - May 8, 2018, 12:05 PM

Representatives of the European Commission (EC) and the U.S. government were ready to sign an agreement in principle to settle their long-lasting dispute over wet-lease time limitations at the recent EU-U.S. Joint committee meeting in The Hague. But the topic fell from the agenda at the last minute due to a “linguistic issue raised by a member state,” AIN learned.

The Commission spokesperson’s service did not respond to AIN’s request for comment, but several EU sources said France apparently snubbed reviewing the text because of a lack of a French version. The move appears part of a wider campaign by France to advance French to the forefront of official EU languages rather than English now that UK voters have chosen to exit the bloc.

According to a draft agreement seen by AIN, the EU—plus Iceland and Norway—committed not to impose time limitations on the operation of wet leases between U.S. airlines, or between U.S. airlines and other airlines. The U.S., in turn, promised the same and will not impose time limitations on the operation of wet leases between European airlines, or between European airlines and other airlines for operations to and from the U.S.  

The two sides have fought over the matter for years. The reason centers on an inconsistency between EU law and the 2007 EU-U.S. open skies agreement, which provides for an open wet-lease regime. But a couple of months after the air transport agreement (ATA) came into force—in April 2008—the EU adopted new air transport rules on market access, which, among other things, introduced a series of conditions on European airlines wet-leasing from non-EU carriers and imposed a seven-month duration limit, renewable once. The U.S. subsequently retaliated by imposing a similar cap and started implementing stricter procedures for EU carriers applying for or seeking renewal of their authorization to fly wet-leased aircraft from other EU carriers on routes between the U.S. and Europe.

The dispute consistently has appeared on the agenda of the biannual EU-U.S. joint committee meetings. The EU insists it is trying to solve the matter internally while the U.S. side stresses its frustration with the lack of progress and laments the competitive disadvantage that U.S. carriers face in wet leasing to EU carriers. The EU delegation has always dismissed the argument while highlighting that no EU rule prevented U.S. wet-leased aircraft from operating within the EU or even in a member country, whereas U.S. rules prevent EU wet-leased aircraft from flying in the domestic U.S. market. EU airlines also express annoyance with the U.S.’s “public interest test” requirement as part of the approval procedure.

Last May the Council, which represents the EU countries, authorized the Commission to negotiate a new wet-lease deal with the U.S. The mandate resulted in the agreement, which the Commission now hopes to initial as soon as the administrative formalities get sorted.

Europe’s pilots have expressed concern. “We appreciate the Commission’s objective to strike a balanced agreement with the U.S., which would be beneficial to all parties—including EU carriers that want to enter the U.S. market. However, we remain concerned that given the U.S.’s hard negotiating position, but in particular structural issues—like their public interest test—will make it quasi-impossible for the EU to obtain a balanced deal,” European Cockpit Association (ECA) secretary general Philip von Schöppenthau told AIN.

The ECA also worries that if wet-leases with the U.S. become fully liberalized, other countries will ask for the same. “It is a form of a-typical aircrew employment that could undermine labor standards in Europe and replace European production and jobs,” he said.