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New Open Skies air deal to bring bigger EU-US stakes

25 March 10 18:33 GMT

A new agreement between the EU and the US to further liberalise trans-Atlantic air travel paves the way for foreigners to take major stakes in US airlines.

EU airlines will allow US investors to take majority stakes in themselves.

Foreign control of US carriers is currently capped at 25% - US airlines could gain ownership of EU carriers above the current 49.9%.

The deal has been hailed as a "major step forwards" in the so-called Open Skies liberalisation process.

The first, most important stage, allowed unlimited access to and from European and US cities for carriers and was agreed three years ago.

Services began in March 2008.

Major boost

The EU transport ministers needs to approve the latest move, which would also allow European carriers to bid for US government contracts.

US Congress also needs to agree to further open up its markets, something it has not been happy to do in the past.

The European Commission vice-president for transport, Siim Kallas, said: "Both sides have agreed to increase regulatory co-operation, and remove the barriers to market access that have been holding back the development of the world's most important aviation markets."

The Commission says full liberalisation would be worth 12 billion euro (£11bn, $16bn) and create 80,000 new jobs.

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