UK resumes US 'open skies' talks

BA hopes to win antitrust immunity for its US deal this year

The UK and US resume talks this week on freeing up the rules on air travel between the two countries.

On Friday, France and the US sealed a deal, effectively giving US and French airlines unlimited access to each other's airports.

But talks between UK and US officials have not been running as smoothly, and it is thought unlikely that the two sides will reach agreement quickly.

Bill Mosley, at the US Transportation Department, said: "We are not planning to reach an agreement in this round.

"Hopefully, we will be able to move onto another round."

The two countries failed in 1999 to reach a bilateral agreement, with the sticking point then being access to London's Heathrow airport, the world's busiest international airport.

However, the troubles the airline industry is facing worldwide has increased pressure on both sides, who are at least expected to pin down a timetable for negotiations this week.

"There is no negotiating going on and there are no decisions to be made," a spokesman for the UK's Department for Transport, Local Government and the Regions said.

However, these talks do have a new urgency said Daniel Solon, a former director of American Airlines and TWA, now at the airline consultancy Avmark International,

"It is really critical now for both sides of the Atlantic," he told the BBC's World Business Report.

"Now it is much more serious that they do need one another's support."

Alliances

The French deal should clear the way for Air France and US carrier Delta Airlines to deepen their alliance, co-ordinating fares and schedules.

US regulators had set an 'open skies' agreement as a pre-condition for granting the deal anti-trust immunity.

Anti-trust immunity would effectively allow the two companies to operate as one.

British Airways (BA) hopes to win a similar clearance for its proposed alliance with American Airlines.

BA chief executive Rod Eddington said at the weekend said he hoped the government would be able to deliver an anti-trust immunity before the end of the year.