Fears that Ireland could be stripped of its right to strike bilateral aviation agreements with the United States appeared to recede yesterday when the European Union's Court of Justice stopped short of granting the European Commission the mandate it is seeking to broker transatlantic air pacts on behalf of EU members.
The court ruled that bilateral aviation deals between eight members-states and the US breached EU competition law but failed to explicitly endorse the commission's insistence that it should be granted sole authority to conclude "open skies" agreements.
The findings will strengthen the position of the Shannon stop-over, which was established under a long-standing bilateral pact with the US.
The future of the mandatory stop-over for certain trans-atlantic flights would have been thrown into doubt were the commission allowed to steer EU aviation policy.
The Luxembourg-based court said bilateral deals concluded by Austria, Belgium, Denmark, Finland, Germany, Luxembourg, Sweden and Britain which make it easier for those countries' airlines to fly to the US in return for giving US airlines open access to their own airports discriminated illegally against carriers from other EU states.
But the judges dealt a blow to the commission's ambitions of negotiating an "open sky" arrangement with the US on behalf of the EU as a single bloc.
It insisted Brussels only had the automatic competence to forge air pacts in areas which were already governed by EU legislation - such as intra-EU flights and computerised reservation systems.
Hailing the decision as a hugely significant step towards liberalisation of the EU airline industry , the EU transport commissioner Ms Loyola de Palacio urged member- states to grant it the authority to negotiate "open sky" agreements.
A pan-EU deal would lead to a succession of mergers in the European aviation industry that would make the sector more competitive, Ms de Palacio predicted.
She said: "We can see that there are 12 flag carriers with this global international vocation. Perhaps we won't be able to keep all 12.
"The logical trend in the market will mean that there will have to be a reduction in the number of airlines with a global vocation."
But the Minister for Transport gave her assertions short shrift. Mr Brennan insisted the ruling did not affect any of Ireland's "open skies" agreements with the US and warned the Government would trenchantly resist any attempt by the EU to wrest competence in this sphere from individual member- states.
He said: "The ruling in this case may result in the European Commission reactivating its request for a mandate from the Council of Transport Ministers to negotiate with the United States on an EU-US 'Open Skies' agreement. Ireland has consistently resisted giving the Commission such a mandate."
The Munster MEP Mr John Cushnahan warned the commission would take heart from the ruling and redouble its efforts to assume responsibility for aviation policy throughout the EU.
He said: "Today's ruling does not affect the current status of Shannon Airport but it is imperative that the Government acts to copperfasten the continuation of this policy which is vital to regional development in the mid-west of Ireland."
He added: "It would be prudent for the Government to seek immediate clarification on the impact of today's ruling on the future of the current bilateral agreement between Ireland and the US."
Aer Lingus said it was studying the implications of the findings but declined to comment further. Yesterday's judgment brings closure to a legal case running since 1998.
