EU and US agree tentative 'open skies' deal

The European Union and United States agreed on Friday to the outlines of a new pact to open transatlantic aviation markets, smoothing over a rift on airline ownership in the hope of boosting traffic and creating jobs.
The executive European Commission said the provisional "open skies" deal covered ownership and control rights over US airlines by EU investors and would allow the EU to restrict US investment in EU airlines.
It would also include provisions on antitrust immunity to facilitate airline alliances. The deal, if approved by EU transport ministers, would go into force in October.
The world's top two trading partners have been working for years on a way to increase competition between EU and US airlines and replace bilateral agreements between Washington and some EU nations with a broader pact to include more countries. But a tentative pact sealed in November 2005 had remained in limbo after Washington withdrew a proposal that would have eased restrictions on foreign investment in US airlines.
The two sides reached a breakthrough, making "decisive progress" on a provisional pact that was ready to go before EU transport ministers on March 22, said Michele Cercone, spokesman for European Transport Commissioner Jacques Barrot.
"This can be considered a major breakthrough," Cercone said. The draft resulted from renewed talks that began earlier this year and continued in Brussels this week, he said.
The Association of European Airlines (AEA), which represents carriers such as British Airways, Lufthansa and Air France KLM, said the provisional pact appeared to show US movement on European demands that EU carriers have more opportunities to invest in US counterparts. "Our initial reaction is that there seems to be a substantially improved balance in the wording of the agreement," AEA Secretary General Ulrich Schulte-Strathaus said in a statement.
Germany, which holds the rotating EU presidency, has said the 27 nation bloc would continue to press for a change in the US limits on foreign investment. But the United States has said it would not re-table a proposal allowing international investors some decision-making power in US airlines.
The EU says a pact would generate 26 million additional transatlantic passengers over the next five years, provide up to 12 billion euros ($15.8 billion) in economic benefits, and create 80,000 new jobs in the EU and United States combined.