EU Parliament Backs New Air Deal with U.S.

By Jan Sliva, Associated Press Writer

posted: 11 October 2007 11:59 am ET

: A British Airways Airbus A320 flies over residential rooftops on its final approach to London Heathrow Airport on Wednesday Aug. 1, 2007. The EU Parliament has approved a new transatlantic Open Skies deal with the U.S. under which -- initially, at least -- U.S. airlines would be able to fly passengers from major European airports such as Heathrow to other destinations within the European community but European airlines wouldn't be able to fly domestically within the United States. However, if the U.S. doesn't offer concessions on airline ownership or flights within the U.S. in talks next year, the EU can end the deal in 2010. Credit AP Photo/Kirsty Wigglesworth

BRUSSELS, Belgium (AP) -- The European Parliament gave its backing Thursday to an aviation deal between the European Union and the United States that opens up restricted trans-Atlantic routes, but said U.S. limits on foreign ownership of airlines was still a problem.

The "Open Skies" deal will allow airlines to fly from anywhere in the EU to any point in the U.S. It will take effect March 30 -- five months later than originally planned after Britain won its demand earlier this year for extra time before opening up London Heathrow, the EU's busiest airport.

"It's page one in a new chapter in aviation on both sides of the Atlantic. It's an important stepping stone towards more integrated trans-Atlantic aviation traffic," said Belgian Socialist lawmaker Said El Khadraoui, charged with steering the new rules through the EU assembly.

European negotiators now want to push on with new talks to eliminate remaining barriers on airline ownership and limits to routes EU airlines can fly in the United States.

Under the new rules, U.S. carriers, for example, will now be able to fly from New York to London, where they can pick up passengers and fly on to Stockholm -- offering competition on trips within the EU. But EU airlines will still not be able to operate domestic American routes, an issue EU parliamentarians urged the EU governments to take up with the United States in further talks that are to start next year.

The pact was originally scheduled to take effect Oct. 28, but Britain succeeded in delaying that because of concerns about Heathrow.

Only four airlines -- British Airways PLC, Virgin Atlantic Airways Ltd., AMR Corp.'s American Airlines and UAL Corp.'s United Airlines -- currently have the right to fly from Heathrow to the U.S., a lucrative route that represents around a third of all EU flights to the United States.

The EU has said the Open Skies deal -- already unanimously approved by the member states -- would reduce the cost of tickets, putting an extra 25 million people on trans-Atlantic flights within five years. Just under 50 million travelers now fly those routes.

It has also said the deal will generate benefits of up to US$17 billion (euro12 billion) in five years as ticket prices fall, airlines generate savings and the market grows. That would create up to 80,000 jobs spread equally between Europe and the United States, it said.

Currently, airlines flying between the EU and the United States operate on the basis of bilateral agreements between the individual member states and the U.S.