Agreement on "open skies" finally reached

A new agreement which promises "open skies" between Europe and the United States has been signed. This should mean more competition on flights across the Atlantic.

After years of discussion a deal has been struck by the European Union's Transport Commissioner Jacques Barrot and his US counterpart Mary Peters, that allows any EU-based airline to fly from any city within the EU to any city in the US, and vice versa.

Jacques Barrot said: "We have an opportunity to unlock major benefits on both sides of the Atlantic. In economic terms, this unprecedented agreement would represent a step change - it could be worth up to €12 billion in economic benefits and up to 80,000 new jobs."

But under pressure from the UK government the plans won't actually be introduced until March 2008 as questions were raised about American regulations which restrict non-US airlines from operating domestic routes in America, for example, blocking a US-based but European owned airline from offering services between New York and Los Angeles.

British Airways and Virgin Atlantic, who are set to see their monopoly position on Atlantic flights from Heathrow Airport severely curtailed, were not as celebratory.

Willie Walsh, BA chief executive, said: "The EU is naive to believe the US will deliver on the next stage of liberalisation without sanctions so we are pleased the UK government has recognised this and demanded an automatic termination clause.

"With the EU having given away their most valuable negotiating asset - Heathrow - the UK government must stand by its pledge to withdraw traffic rights if the US does not deliver further liberalisation by 2010."

Virgin accepted that it was a good deal for passengers, and hoped to expand its network, but said it did not open up US markets to European and British carriers so they could operate flights between US cities, something close to Virgin's heart as it has faced numerous regulatory roadblocks as it struggles to get Virgin America off the ground.

One airline pleased with the open skies agreement was bmi, who has long claimed the control of Heathrow Airport's trans-Atlantic flights by BA, Virgin Atlantic, American Airlines and United Airlines restricted passenger choice.

Nigel Turner, chief executive officer of bmi, said: "This decision is a victory for the travelling public. bmi is now ideally placed to take advantage of this major breakthrough and turn into reality our long held ambition to commence services to the US from our main operational hub at Heathrow."

bmi said it would look to announce details of its first US services from Heathrow in the near future.

© Cheapflights Ltd Craig McGinty