Several Potential Sticking Points Remain

Friday afternoon, US Transportation Secretary Mary Peters announced negotiators with the United States and the European Union reached a tentative agreement on easing restrictions on trans-Atlantic flights.

If approved, the 'Open Skies' agreement "will offer more choice and convenience to American consumers," said Peters in a one-paragraph statement, that came hours after officials on the European Commission announced they would ask EU heads of state to approve the plan during a March 22 meeting.

Details of the plan weren't revealed, according to Bloomberg -- but European officials said the deal included US agreement to ease at least some of that country's ban on foreign ownership of domestic airlines. As Aero-News reported in December, the DOT withdrew a proposal that would have changed those rules governing international investment in US airlines... a move many suspected would delay agreement on an Open Skies plan.

As little is known yet about the actual plan, representatives on both sides of the pond were cautious in their optimism about the agreement.

"While we have not seen the details, this tentative agreement has the potential for creating new avenues of economic development between the US and Europe," said Air Transport Association president James May.

May's European counterpart -- Association of European Airlines secretary general Ulrich Schulte-Strathaus -- expressed skepticism about the plan, noting "some fairly fundamental issues needed to be resolved. We still have to review the small print."

That small print will reveal how the US plans to handle the issue of foreign ownership, which has stalled DOT approval for upstart carrier Virgin America, owned in part by Sir Richard Branson's Virgin Group. Conversely, American carriers looking to make inroads into London's Heathrow Airport will be curious to see how, or if, the agreement resolves arguments concerning a deal between American Airlines and British Airways, that effectively locks other US carriers out of that airport.

"We have an opportunity to unlock major benefits on both sides of the Atlantic," said EU Transport Commissioner Jacques Barrot. "The open aviation area could be a centerpiece for a reinvigorated trans-Atlantic relationship."

"The devil is always going to be in the detail with this kind of agreement," said Ed Faberman, head of the Air Carriers Association, which represents smaller US carriers. "I think we were at a point with these talks that if they didn't do something, they weren't going to be able to revisit this later."

FMI: www.dot.gov, www.eu.int