Study shows open-skies deal means lower fares, more flyers

The implementation of an agreement to create open aviation between the U.S. and the European Union will increase the number of transatlantic travelers by as many as 26 million over the first five years, lower transatlantic fares, create as many as 81,000 jobs in the U.S. and E.U. and provide up to $16 billion in economic benefits, according to a study done for the European Commission.

Booz Allen Hamilton's London office completed the study in January, with the help of Erin von den Steinen, Ingomar Joerss, Pablo Mendes de Leon and the Alexandria, Va.-based Campbell Hill Aviation Group.

Its conclusions regarding a deal's impact on passenger and cargo services appear to have been a significant part of the reason the E.U. agreed to an aviation deal with the U.S. in March, even though the E.U. didn't get several of the things it wanted; the E.U. cited the study's conclusions in its press releases announcing the agreement.

"Airlines operating E.U.-U.S. services will face additional competition and pressure on costs," the study said. "Moreover, the ability to restructure across national borders and to organize deeper cooperative alliances gives the potential for significant gains in productivity and resulting cost savings. These factors are also expected to lead to lower fares, increased traffic, additional jobs and further economic benefits."

The study's conclusions on the increase in the number of passengers were based on the demonstrated impacts of existing open-skies agreements between the U.S. and individual countries in the E.U.

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