[Congressional Record Volume 141, Number 176 (Wednesday, November 8, 1995)]
[Senate]
[Pages S16801-S16803]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            AIR SERVICE OPPORTUNITIES IN CONTINENTAL EUROPE

  Mr. PRESSLER. Mr. President, I rise today to discuss existing and 
emerging air service opportunities on the European Continent for U.S. 
passenger and cargo carriers. These opportunities include not only 
serving destinations within Europe, but also points beyond such as the 
Middle East and Asia-Pacific markets. As the British continue to refuse 
to open their skies to our carriers, developments in other countries 
represent alternatives that are increasingly attractive and are taking 
on greater significance.
  Unfortunately, recent negotiations with the United Kingdom seeking to 
liberalize our air service relationship with that country have hit an 
impasse. At this time, it is unclear whether that impasse is 
insurmountable. As is often the case with the British, the primary 
sticking point is our request for greater access to London Heathrow 
Airport, the main hub of British Airways. Access to Heathrow is 
particularly important to our carriers since it is an international 
gateway airport offering connecting service opportunities beyond the 
United Kingdom to markets virtually worldwide.
  Another key and often overlooked area of disagreement is our request 
for full liberalization of air cargo services between and, importantly, 
beyond our two countries. Currently, the ability of our cargo carriers 
to serve the United Kingdom, load additional freight there, and fly on 
to other countries is severely limited by the United States-United 
Kingdom bilateral aviation agreement. British negotiators continue to 
reject our requests for fully liberalized air cargo opportunities, 
despite a March 1994 recommendation by the House of Commons Transport 
Committee to that effect. What does all this mean?
  The answer to that question is contained in the insights of one 
aviation authority who wrote recently ``[a]irlines and passengers are 
free agents. If extra capacity is not developed at Heathrow, the 
airport will not be able to satisfy demand and airlines will expand 
their business at continental airports.'' The author added ``if 
airlines are denied the opportunity to grow at Heathrow, many will 
choose Paris, Frankfurt, or Amsterdam.''
  Mr. President, this is not rhetoric. It is not a threat by U.S. 
interests designed to gain negotiating leverage. To the contrary, the 
author of these quotes is BAA plc, the British company that owns and 
operates Heathrow as well as other United Kingdom airports. BAA is very 
perceptive. Obviously, BAA recognizes that in today's global economy 
the long-term consequence of protecting one's air service market 
amounts to little more than the stimulation of competitive 
opportunities elsewhere. One need only look across the English Channel 
to continental Europe to confirm that already is taking place.
  There was a time when geographic factors and the limited range of 
commercial aircraft made the United Kingdom the international gateway 
of necessity for United States carriers serving Europe and beyond. 
Times have changed. New generation long-range aircraft have made the 
option of overflying the United Kingdom viable from both an operational 
and economic standpoint. Simply put, if the British do not want the 
business of our air carriers, United States carriers can and will look 
to the European Continent for new gateway airport opportunities. Today, 
I wish to discuss a few of these existing, emerging, and potential air 
service opportunities.
  First, there is tremendous growth in international passenger traffic 
at Amsterdam's Schiphol Airport. This is 

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due, in large part, to the successful alliance between Northwest 
Airlines and KLM Royal Dutch Airlines, and clearly demonstrates BAA's 
prediction already is coming to pass. How did it happen? Recognizing 
the significant mutual benefits that result from free trade among 
nations, in 1992 the Netherlands signed an open-skies agreement with 
the United States. That agreement permits the marketplace, not 
Government restrictions, to determine air service between the two 
countries. The results speak very loudly.
  Between 1992 and 1994, total passenger traffic between the United 
States and the Netherlands grew an astounding 56 percent while total 
passenger traffic between the United States and the United Kingdom grew 
just 7.5 percent. In 1992, 18.6 million international passengers 
arrived and departed from Schiphol. By 1994, that number grew to 22.9 
million passengers--an increase of more than 23 percent. It is 
anticipated this growth will continue with nearly 28 million 
international passengers using Schiphol by 2000. What does this 
illustrate? Among other things, it clearly demonstrates Schiphol is 
drawing passenger traffic originating in the United States away from 
United Kingdom airports, particularly Heathrow.
  Cargo opportunities also are booming at Schiphol. In 1992, nearly 
725,000 metric tons of international cargo were loaded and unloaded at 
the airport. By 1994, that number grew to 838,127 metric tons, an 
increase of nearly 12 percent. By the year 2000, it is estimated 1.2 
million metric tons of international air cargo will pass through 
Schiphol.
  Consistent with that forward-looking view of aviation relations, the 
Dutch also have in place a long-term airport growth plan to enable 
Schiphol to accommodate the rapidly expanding traffic the United 
States-Netherlands open skies has spurred. The goal is no less than 
making Schiphol one of the major European hubs for intercontinental 
passenger and cargo traffic. By the year 2015, that plan calls for 
Schiphol to have the capacity to serve up to approximately 56 million 
passengers and 4 million metric tons of cargo annually.
  Mr. President, the Dutch clearly want the business of United States 
carriers. Based on the growth of international passenger and cargo 
traffic at Schiphol, it is clear U.S. carriers are responding to this 
message.
  Second, our recently completed nine-nation European open-skies 
initiative should stimulate additional new continental gateway airport 
opportunities. The nine European countries with which the United States 
recently signed open-skies agreements are Austria, Belgium, Denmark, 
Finland, Iceland, Luxembourg, Norway, Sweden, and Switzerland.
  Brussels Zaventem Airport illustrates my point well. Even before the 
United States-Belgium open-skies agreement was signed a few months ago, 
international passenger and cargo growth at Brussels Airport was 
impressive. For instance, between 1993 and 1994 international passenger 
traffic grew to more than 11 million, a 12-percent increase. During the 
same period, international freight passing through Brussels Airport 
rose a remarkable 24 percent to more than 380,568 metric tons.
  No question, Brussels Airport is emerging as an important European 
gateway airport for intercontinental traffic. The recent open-skies 
agreement should cause existing growth to accelerate. To ensure this 
comes to pass, the Belgians recently expanded Brussels Airport to put 
it in a position to fully capitalize on new service opportunities. 
Earlier this year, a new terminal opened at Brussels Airport which has 
more than doubled the airport's capacity from 10.5 to 21 million 
passengers annually. This terminal expansion initiative, coupled with 
significant runway capacity, will make Brussels very attractive to U.S. 
carriers.
  Indeed, a number of U.S. passenger carriers already provide nonstop 
service from the United States to Brussels. Delta Air Lines, through 
its code-sharing alliance with the Belgian national carrier Sabena, 
also provides nonstop service from key United States gateway cities 
including New York, Boston, and Chicago.
  One clear indication the United States-Belgium open-skies agreement 
will be a catalyst for increased transatlantic service from the United 
States to Belgium appeared in a recently filed application by Delta 
seeking antitrust immunity for its alliances with Sabena as well as 
Swissair and Austrian Airlines. In that filing, Delta indicated it 
plans no less than to use the Delta-Sabena alliance to make Brussels 
Airport one of a multihub network in continental Europe. No wonder, 
Brussels Airport is regarded as Europe's only true hub-and-spoke 
operation.
  Third, a potentially tremendous opportunity for United States 
carriers may soon emerge in Germany. The United States and Germany 
commenced air service negotiations in July which I very much hope will 
result in an open-skies agreement. It is my understanding those talks 
are progressing well.
  What would an open-skies agreement with Germany mean for United 
States carriers? In short, it would mean significant new air service 
opportunities for our carriers between the United States and Germany. 
Equally important, German airports would provide well-situated gateway 
opportunities for our carriers to serve points beyond Germany such as 
the booming Asia-Pacific market.
  One such opportunity is the airport in Frankfurt which already is 
being used by some U.S. carriers as an alternative to Heathrow. 
Frankfurt-Main Airport's ideal location in Europe already has fueled 
tremendous growth for that facility. As a matter of fact, it already 
ranks as the second busiest airport in Europe next to Heathrow. Last 
year, for instance, 27.6 million international passengers passed 
through Frankfurt as well as more than 1.2 million metric tons of air 
freight. Each total represented nearly a 10-percent increase over 1993 
traffic levels.
  Frankfurt Airport is not resting on its laurels. In fact, the Germans 
have ambitious plans to ensure Frankfurt Airport can meet rapidly 
expanding demand. Last year, a new terminal complex was completed which 
enables the airport to handle an additional 12 million passengers 
annually. In addition, the runways at Frankfurt Airport already have 
the capacity to handle nearly as many aircraft movements per hour as 
those at Heathrow.
  By the year 2010, forecasts indicate Frankfurt Airport will handle 
approximately 53 million passengers. As far as air cargo is concerned, 
new freight facilities are expected to more than double air cargo 
passing through Frankfurt from its current level of 1.2 million metric 
tons. Unquestionably--particularly under an open-skies regime--
Frankfurt represents an attractive option for U.S. carriers who are 
frustrated by their inability to gain or expand access at Heathrow.
  There also are other important air service opportunities elsewhere in 
Germany. Last year, 8.3 million international passengers passed through 
the airport in Munich. Plans by Lufthansa to make Munich its second 
largest hub, including using it as a gateway for some Asia-Pacific 
service, should spur additional international passenger growth at the 
airport. An additional option is Dusseldorf's Rhine-Ruhr Airport which 
last year served 10.3 million international passengers.
  A United States-Germany open-skies agreement undoubtedly will foster 
additional growth in the number of international passengers using the 
airports in Frankfurt, Munich, and Dusseldorf. Also, it could 
accelerate construction of a planned new airport in Berlin. The new 
Berlin-Brandenburg airport would offer yet another gateway opportunity 
for U.S. carriers.
  Mr. President, as I have said on other occasions in statements to 
this body, we must continue pressing for a liberalized air service 
agreement with the United Kingdom. We owe that to consumers on both 
sides of the Atlantic who unquestionably would be the biggest winners 
if such an agreement were reached.
  Concurrently, however, I believe we should intensify our efforts to 
secure an open skies agreement with Germany. In combination with 
existing and emerging opportunities for United States carriers in 
continental Europe, such an agreement would put tremendous competitive 
pressure on the British to open Heathrow to United States carriers. 
Moreover, if the British doubt that the restrictive United States-
United Kingdom bilateral agreement is forcing United States carriers to 


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overfly the United Kingdom to European continental airports, an open-
skies agreement with Germany that furthers the exodus of United States 
flights to the continent would dramatically make this point. If Britain 
does not want our business, clearly there are other nations who do.
  Mr. President, may I proceed for 2 more minutes on the same subject?
  The PRESIDING OFFICER. Is there objection?
  No objection is heard. Without objection, it is so ordered. The 
Senator is recognized for 2 additional minutes.
  Mr. PRESSLER. Mr. President, to summarize what I have said, as a 
chairman of the Commerce Committee and a member of the Aviation 
Subcommittee, I am very eager to see us move forward on efforts to 
liberalize our bilateral aviation agreement with the United Kingdom. I 
am very concerned about the problem of access to Heathrow and resulting 
limitations on the ability of our carriers to serve markets beyond the 
United Kingdom. Also, I am disturbed by British restrictions on the 
beyond rights of our cargo carriers. Similarly, I am also concerned 
about attempts by the Government of Japan to prevent our carriers from 
fully participating in the booming Asia-Pacific market beyond Tokyo.
  Very frankly, what these countries try to do is they have a system to 
block out U.S. passenger and cargo carriers as well as to prevent our 
carriers from serving beyond markets. I believe we should put the 
emphasis on jumping over Heathrow if the British are unwilling to 
cooperate by opening their skies to United States carriers. I have 
urged our Secretary of Transportation, Secretary Pena, who I think does 
a good job in international aviation negotiations, to treat 
international aviation as a trade issue and to focus on maximizing 
economic benefits for our country. I understand this is very difficult 
for Secretary Pena to do since each time he attempts to follow this 
course, a group of Senators and Representatives who represent a certain 
airline criticize what he is doing. We have to support our Secretary of 
Transportation when he is trying to negotiate these difficult 
agreements. We need to put the interests of the U.S. economy first.
  The situation with the British is very frustrating and unacceptable. 
Britain is dragging its feet on liberalizing our air service agreement. 
They are stalling. I think we should make it very clear to the British 
if they continue to severely restrict opportunities for our carriers to 
serve the United Kingdom and points beyond, United States passenger and 
cargo carriers will turn to Germany and Amsterdam and other points in 
Europe. I would hope that continued progress in liberalizing our 
aviation relations with countries in continental Europe, and the 
continued exodus of United States carriers to capitalize on these 
opportunities, will drive home this point. Simply put, our carriers are 
not being treated fairly by the British. Unfortunately, the same is 
true in Japan where the Government of Japan is trying to prevent our 
carriers from fully participating in the rapidly expanding Asia-Pacific 
market.
  I hope our Secretary of Transportation stands firm with the British 
and the Japanese. I support him, and I urge the Members of this body to 
do so. He is doing a good job in international aviation matters under 
difficult circumstances.
  Mr. LEAHY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Mr. President, I ask unanimous consent to be able to 
continue as in morning business, not in reference to the pending 
business, but another matter, with the understanding that, if there is 
someone seeking recognition not under the same standard, then we return 
to a quorum call.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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