The United States and the European Union reached a tentative 'Open Skies' deal in November 2005 to dramatically expand aviation service and boost competition on both sides of the Atlantic.

Negotiators made substantial and surprising progress in State Department-led talks this week on the breakthrough agreement that must be reviewed by EU transport ministers who will meet next month.

Europe still wants to see if a crucial side issue -- the US proposal to dismantle some limits on foreign investment in domestic carriers -- is finalized and whether it would truly facilitate greater investment opportunities in American commercial aviation companies and greater access to the biggest cities.

The agreement does not need US congressional approval. There has not been universal support among lawmakers, airlines and labor groups in the United States for opening up the trans-Atlantic market.

The deal, if approved, would allow every EU and US-based airline to fly between every city in Europe and the United States. The deal would effectively remove fiercely protected competition barriers to London's Heathrow Airport, Europe's foremost gateway for international business travel.

The agreement would not impose restrictions on the frequency of service to and from any European or US city, the type of aircraft used, or routes selected by airlines.

It would also permit unlimited rights for service beyond the 25 member EU states and United States to points in third countries.

What will be the impact of an US-EU open skies on traffic volumes, the competitive position of airports and airlines on both sides of the Atlantic, consumer welfare and economic effects?

(Reuters/Airneth)

Download presentations of the 2nd Airneth Annual Conference 'EU-US Open Skies', 17-18 April 2008, the Hague. day 1, day 2

See also www.euractiv.com