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Tuesday, 25 July, 2000, 05:51 GMT 06:51 UK
Hopes on 'open skies' talks

BA cannot expect an open US market "through some backdoor"
Hopes are growing that the UK and the US will reach an agreement aimed at bringing more competition to the transatlantic flights market.

The two countries held talks in June and are planning to hold more discussions to the "open skies" proposals in September.

A deal is important because it would allow more airlines to fly the transatlantic route, slashing prices for consumers.

"We've probably got about as close as we've ever been," said US Transportation Secretary Rodney Slater said.

"The talks have been going pretty well, though a little slower than we had thought," he said.

End year agreement

Mr Slater wants to conclude an agreement on liberalising passenger and cargo to and from the UK by the end of this year.

Merger talks between the UK's British Airways and the Netherlands KLM have increased tensions in reaching some kind of deal.

KLM executives have said the merger's success would hinge on the US and UK government's agreeing to an "Open Skies" policy, as both KLM and BA operate flights to the United States.

If British Airways was to do a deal with Dutch airline KLM, it would, in theory, be able to fly to the United States from Amsterdam's Schipol Airport as well as from Heathrow.

But Mr Slater said a BA-KLM merger would not automatically give the UK company increased access to the US market.

"BA cannot expect any benefit from an open U.S. market through some backdoor," Mr Slater.

"It's really these kind of arrangements that necessitate an open market where the parties can benefit from added activity," he said.

Four airlines fly transatlantic

At present, only four airlines can offer flights between Heathrow and the US and more airlines from the two countries want access to the lucrative market.

The current agreement allows only British Airways, Virgin Atlantic, American Airlines and United Airlines to fly direct scheduled flights between Heathrow and the US.

But other airlines, which have seen the large profits that can be raked in on what is a restricted market, have been keen to enter the fray.

The UK is just one of four European countries not to have negotiated an open skies deal with the US.

The others are Greece, Ireland and Spain.

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See also:

13 Jun 00 | Business
Pessimism on 'open skies' talks
04 Jun 00 | Business
Hopes grow for Heathrow flights deal
28 Jan 00 | Business
Heathrow-US flight talks fail
07 Jun 00 | Business
British Airways confirms KLM talks
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