A bilateral agreement may give one European airline the right to fly anywhere in the partner country from anywhere in its home market. That restriction, says the commission, distorts the internal EU market by giving airlines from one member advantages over airlines from another. Worse still, the nationality rules within each air-services agreement prevent mergers and takeovers across national boundaries because the disappearance of a national airline may mean the loss of lucrative routes. The nationality rules hamper competition between European airlines . . . The problem is particularly acute with the Americans, not only because of their negotiating muscle, which has won them fifth-freedom agreements which other outsiders do not enjoy, but because of the size of their country.
Most European countries are small.
A US airline might be able to fly to Luxembourg, for instance, and then pick up local passengers bound for Paris in competition with the French and Luxembourg carriers. But the French airline cannot land in Washington and compete with domestic carriers for passengers travelling to Miami. Although the distance is far greater, that would be a forbidden sixth-freedom activity. The same restriction might apply, too, to foreign carriers ferrying passengers between cities in China or Russia. But the sheer wealth of the American economy means the US domestic market is considerably more attractive to European airlines than the markets to their east.