[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 22 March 2007, 18:46 GMT
EU backing for 'open skies' deal
Plane's wing
Supporters say 'open skies' should bring down airline fares
European Union transport ministers have unanimously backed an "open skies" aviation deal with the US aimed at liberalising transatlantic air travel.

The deal, which has been criticised by some UK airlines, eases restrictions on travel between Europe and the US.

The deal will also challenge British Airways' dominance at Heathrow airport.

But EU Transport Commissioner Jacques Barrot said the deal could collapse if the US did not act to allow foreign airlines more investment in the sector.

Investment issue

The UK had raised concerns that open skies reform does not go far enough on US airline ownership rights.

The US has insisted on limiting any foreign company from owning more than 25% of a US airline's voting rights.

"We want not only to open flights to competition but also to open up foreign investment in aviation," Mr Barrot told the BBC's Joe Lynam.

"I attach a lot of importance to this goal."

Supporters say open skies reform will boost competition between airlines and lead to lower air fares.

The EU is naive to believe the US will deliver on the next stage of liberalisation without sanctions
Willie Walsh, BA chief executive

US Transportation Secretary Mary Peters welcomed the decision, saying the deal would boost "economic, political, and personal relationships between our two continents for years to come."

However, at Britain's request, EU ministers agreed to delay plans to implement the deal from October this year to March 2008.

The UK had raised concerns that open skies reform did not go far enough on US airline ownership rights.

The US has insisted on limiting any foreign company from owning more than 25% of a US airline's voting rights.

Tough choices

The EU said consumers would see a total of up to $16bn (8.1bn) in economic benefits as a result of the deal, as increased competition brings down air fares.

Officials said the agreement could generate 26 million more airline passengers over the next five years, and create up to 80,000 new jobs in the EU and US.

Jumbo jet
British Airways is keen to protect its slots at Heathrow

Under the open skies plan, any EU-based airline will be allowed to fly from any city within the EU to any city in the US, and vice versa.

But while US airlines will gain free access to European airports, EU carriers will not be allowed the same rights on domestic routes within the US.

BA chief executive Willie Walsh said the EU had been "naive to believe the US will deliver on the next stage of liberalisation without sanctions".

He added: "With the EU having given away their most valuable negotiating asset - Heathrow - the UK government must stand by its pledge to withdraw traffic rights if the US does not deliver further liberalisation by 2010."

'Good day'

UK rival Virgin Atlantic said it was looking at expanding its services in Europe, possibly offering flights to New York from key European hubs including Paris and Amsterdam.

"It's a good day for the traveller as consumers should eventually be able to fly from any city to any city between the EU and US, and within those countries," said Virgin Atlantic boss Sir Richard Branson.

HAVE YOUR SAY
This is a poor decision for the UK, our airlines gain nothing in America
Ray Cork, Derby

BMI said the decision heralded a "landmark" change to the regulation of flights between Europe and the US.

"Millions of travellers will benefit from additional competition, including lower fares and a greater choice of services," the airline said.

Negotiating the deal was a drawn-out, four-year process, and the breakthrough was only reached weeks ago.

Among the effects of the deal will be an increase in the number of airlines using London's busy Heathrow airport.

BA, Virgin, American Airlines and United Airlines currently dominate transatlantic services from Heathrow.

The deal is set to be signed in Washington on 30 April.


VIDEO AND AUDIO NEWS
What the EU vote means for travellers



SEE ALSO
Q&A: Open skies
22 Mar 07 |  Business
US calls for EU open skies assent
05 Mar 07 |  Business
BA and Virgin knock open sky deal
04 Mar 07 |  Business
US drops plan to open up airlines
05 Dec 06 |  Business
'Open skies' deal faces delay
04 May 06 |  Business
EU-US land 'open skies' agreement
18 Nov 05 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific