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US government and airlines hail EU's `open skies' accord

The US government and airlines on Thursday hailed a landmark EU decision to adopt an "open skies" accord that injects more competition into transatlantic aviation.

US Transportation Secretary Mary Peters said the approval by EU transport ministers would boost "economic, political, and personal relationships between our two continents for years to come."

"Tearing down regulatory barriers allows us to foster more affordable and convenient air travel and gives our airline industry more opportunities to compete, innovate and thrive," she said in a statement.

The European Commission, which negotiated the deal on the EU's behalf, says consumers will see up to 12 billion euros (US$16 billion) in economic benefits as increased competition brings down ticket prices.

The EU estimates the agreement could generate more than 26 million extra passengers over the next five years and create 80,000 new jobs in the EU and US combined.

Under the draft agreement, any EU carrier would be able to fly from anywhere in the bloc to any point in the US and vice versa. But EU airlines will still not be able to operate domestic US routes.

As a result, Peters said, "this agreement will spur growth within our aviation network and enhance the freedom of American fliers to choose where and when they travel."

Unanimous EU agreement on the deal was possible only after ministers overcame British reservations about competition out of London's Heathrow airport, by delaying the date of application to the end of next March.

US airlines hope the pact will boost their recoveries from years of turmoil. Delta and Northwest are still bankrupt. United, which has come out of bankruptcy, has welcomed the new competition despite the prospective entry of new rivals at Heathrow.

The agreement would also lift restrictions on EU carriers buying big stakes in US airlines, although their voting rights in a US carrier would remain capped at 25 percent, much to the chagrin of Britain.
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