Page last updated at 12:08 GMT, Monday, 31 March 2008 13:08 UK

European take-off for open skies

Air France Boeing 777
The new deal ends the restrictions on transatlantic travel for airlines

The first European flight to benefit from the US and European Union "open skies" deal will take off from London's Heathrow airport later.

An Air France plane is due to leave London for Los Angeles at 1700 GMT. It is the first of three new transatlantic routes operated with US airline Delta.

It marks a new era in air travel as limits on which airlines can fly between the US and EU come to an end.

The first open skies New York to London flight landed at Heathrow on Sunday.

The service was operated by Continental Airlines, the fifth largest US airline.

Cheaper flights?

It was one of many airlines previously prevented from operating to Heathrow, a key hub for international travel under a number of bilateral deals dating back 30 years.

Until the weekend, this prized route was the sole preserve of British Airways, Virgin Atlantic, United Air Lines and American Airlines.

OPEN SKIES: WHAT DOES IT MEAN?
It is the end of restrictions on air travel between the EU and the US
It means any EU airline can fly from any EU destination - not just their home country - to anywhere in the US and vice versa
Changes at key airports, including Heathrow, could be limited because of a shortage of landing slots, which are expensive to buy
There is debate on whether increased competition on routes will lead to cheaper tickets because of the high cost of fuel

The new rules are expected to lead to a large rise in the number of carriers on the routes and there are already signs of this.

For April, scheduled flights from the EU to the US have jumped by 11% on the same month last year, according to the International Air Transport Association (IATA).

The highest rise in traffic is observed from London, where the number of scheduled flights has jumped by 25% to 640 from 511.

Analysts also expect prices to come down as a result, although it widely believed the benefits will be felt by business travellers rather than economy fliers, where firms will struggle to bring down costs as a result of high fuel bills.

Other changes

Under the new rules, US airlines can now buy a stake of up to 49% in their European rivals.

But European airlines will still only be able to buy 25% in US carriers.

EU Transport Commissioner Jacques Barrot has pledged to improve that deal, and says if he does not get parity he will roll back some of the open skies agreements from 2010.

IATA has argued that the next round of talks must "address the liberalisation of ownership rules so that airlines can merge or consolidate where it makes business sense."

Giovanni Bisignani, IATA’s director general and chief executive said: "Every other industry has the opportunity to go global. Why not the airlines?"




video and audio news
Why some say the 'open skies' deal is unfair



SEE ALSO
Q&A: Open skies
30 Mar 08 |  Business
The Transatlantic price war
21 Feb 08 |  Business
BA to launch 'open skies' airline
09 Jan 08 |  Business
Airlines agree transatlantic deal
17 Oct 07 |  Business

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