Initial Agreement in U.S.-E.U. Open Skies

E.U. Transport Minister Jacques Barrot announced "decisive progress" had been made on an aviation agreement that would allow more open access to European and U.S. markets. Two major provisions that were disclosed include allowing E.U. airlines to fly from any point in Europe to any point in the U.S. and opening up access to the Fly America program that requires U.S. government agencies to use U.S. carriers for passengers and freight.
The pact, which will be presented to E.U. ministers March 22nd, would also provide some antitrust immunity to help airlines develop alliances.
Though it is unclear how the issue of ownership fared, the E.U. may gain the right to restrict U.S. investment in European airlines if the U.S. holds firm on its position that does not permit foreign ownership beyond 25% of the voting stock of a U.S. airline. One point was clarified on E.U. ownership of non-E.U. airlines. Previously, if an E.U. airline acquired an African airline, for instance, the African airline was subject to the bilateral agreement with the European airline's home country. The E.U. has sought to be the sole negotiator for its member countries-most of which had bilateral agreements directly with the U.S.
Reaction from those most directly touched by such a ruling came quickly. British Airways and Virgin Atlantic said that the ruling would not be good for UK aviation. Some of those critical say that the deal seems to favor U.S. carriers and that the two British carriers would have to give up some of their prime landing and take off slots at Heathrow airport. Simply put, Air France and KLM, Europe's largest air transport group, publicly expressed full support for the finalization of the agreement.

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