High Technology Jobs to Flow from Groundbreaking EU-US Air Service Accord

Studies Measure Past Gains;
Project Benefits for US and EU

Washington, DC, October 14, 2005 - A substantial increase in high technology jobs on both sides of the Atlantic is expected to flow from the successful negotiation of a groundbreaking Clear Skies agreement between the United States and the European Union (EU). That is the principal finding of an independent study published today by Professor Kenneth Button and Jonathan Drexler of George Mason University's (GMU) School of Public Policy.

On Tuesday, the European Union's Transportation Commissioner, Jacques Barrot, and the United States Secretary of Transportation, Norman Mineta, spoke and agreed to resume formal negotiations for a Clear Skies agreement in Brussels on October 17th. The proposed new liberal agreement would replace 25 existing bilaterals between the United States and the European Union's individual member nations with a single agreement that would harmonize the European Union as a single air service entity for transatlantic air service.

The GMU study examined 29 regions within the European Union and concluded that the removal of restrictions, including nationality restriction in the new single agreement, would progressively stimulate the creation of between 7,000 and 54,000 new high technology jobs for each of those regions. The spread is caused by the wide variation in the nature of the individual regions. Collectively, the average increase in high technology jobs for each of the 29 regions would be 30,000 over a period of time.

"As governments spend millions trying to stimulate new jobs, that is a big deal," noted Leo Schefer, President, Washington Airports Task Force, and a member of United States Airports for Better International Air Service (USA-BIAS).

The GMU study also found that historically the removal of air service restrictions leads to service growth at traditional gateways, like Frankfurt, London Heathrow, Paris and New York, as well as enabling more point-to-point service between United States and European markets.

The report was released at a meeting of European and U.S. stakeholders in Washington, DC this morning. The meeting was convened by a coalition of non-traditional gateway airports known as United States Airports for Better International Air Service (USA-BIAS). USA-BIAS member airports board one in every four of the nation's air travelers, but only one in six of its international travelers. The coalition's members operate some of the largest airports in the United States including Dallas/Ft. Worth, Denver, Minneapolis/St. Paul, Las Vegas, as well as the Washington/Baltimore region's Dulles, National and BWI facilities. The group's members seek international aviation policies that will enable them to stimulate more nonstop international flights to serve the economies of their regions.

"Creation of a very liberal single agreement between the United States and European Union can help all our economies on both sides of the Atlantic," James E. Bennett, President and CEO, Metropolitan Washington Airports Authority, noted in welcoming the guests to Washington. "Our goal today, representing airports around the country, and in turn their communities, is to help to frame next week's negotiations with the public purpose of creating new jobs and new prosperity for literally hundreds of thousands of people on both sides of the Atlantic," he added.

The GMU study was co-authored by Kenneth Button and Jonathan Drexler. Button was an economic advisor to the Organization for Economic Cooperation and Development (OECD) in Paris, and an advisor to various governments, including the British Parliament, before joining GMU. Today, Button is University Professor of Public Policy and Director of the Center for Transportation Policy Operations and Logistics at GMU's School of Public Policy in the United States, and he also holds senior positions at the University of Porto in Portugal and at Bologna University in Italy. Drexler is on the research staff at GMU. Previously he spent eight years at Continental Airlines in various scheduling, planning, and operations research capacities.

The GMU study results were reinforced by a review of the benefit to be gained by the Irish economy from creation of a US-EU agreement. This study was reviewed for today's meeting by one of its principal authors, Frederik Sorensen, former Head of Air Transport Policy for the European Commission. Sorensen was the main architect of air transport liberalization in the European Union, which was completed in 1993. "It is clear that a liberal EU/US agreement will create beneficial effects for Ireland, perhaps in the order of a 10% increase in economic activity," the report concluded. The report was commissioned by the Chambers of Commerce of Ireland and that nation's Air Transport User's Council and was published last spring.

"Domestic airline deregulation in the United States and liberalization in Europe over the past quarter century are generally seen as having generated significant economic benefits," Button and Drexler noted in their GMU study. "Analysis of international airline market deregulation is sparser. However, from the studies that have been completed, it is clear that more open air transportation markets foster trade and stimulate growth," their report continued.

"Air transportation, especially international air transportation, is a key input to business location decisions for many multinational corporations. This is not surprising, given that air transportation carries about 40% of the world's trade by value," note Button and Drexler.

"It's really very simple; even with the Internet, you cannot trade if you cannot get there," Schefer said.