22/03/2007

European Union supports 'open skies' deal

European Union transport ministers have backed an 'open skies' deal which aims to ease restrictions on air travel between Europe and the US.

The deal will allow European airlines to fly to any US city from any city in the EU, not just their home country. American airlines will be allowed free access to European airports. However, EU carriers will not be allowed the same rights on US domestic routes.

The deal would see an increased number of airlines using Heathrow airport.

Currently, British Airways, Virgin, American Airlines and United Airlines dominate transatlantic services from Heathrow.

The move is likely to benefit European companies such as easyJet and Ryanair, as well as US carriers, and supporters of the scheme suggest that it will boost competition between airlines and lower air fares.

Britain had opposed to the deal, saying that it did not go far enough on US airline ownership rights and would not be beneficial to Heathrow, which is the busiest airport in Europe.

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

Both BA and Virgin have argued that the deal does not go far enough towards full liberalisation.

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

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

(KMcA/JM)

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