=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/06/05/f= inancial0927EDT0050.DTL ---------------------------------------------------------------------- Thursday, June 5, 2003 (AP) EU governments agree to negotiate single trans-Atlantic aviation pact with = United States PAUL GEITNER, AP Business Writer (06-05) 06:27 PDT BRUSSELS, Belgium (AP) -- European Union governments on Thursday cleared the way for negotiations = to start on a single trans-Atlantic airline access agreement with the United States, a move that could lead to major consolidation in European aviation. Pressured by a court ruling that outlawed existing bilateral deals, EU transport ministers meeting in Luxembourg gave the European Commission, the EU's executive branch, authority to negotiate an EU-wide deal with Washington. EU transport commissioner Loyola de Palacio called it "an historic decision" and said she hoped to launch negotiations with the United States "within a month." For years national governments have resisted anything that could jeopardize the existence of their flagship carriers, no matter how inefficient. But airlines on both sides of the Atlantic are anxious for an EU-wide deal because it would help the struggling industry to consolidate. Officials cautioned that it could take several years to forge a new comprehensive pact. Until then, existing bilateral "open skies" arrangements remain in effect. Washington has said it's willing to talk. "We look forward to negotiating with Europe and expanding on the open skies agreements that we already have in place with a number of EU countries," said John Byerly, U.S. deputy assistant secretary of state. "Open skies" agreements eliminate many restrictions on airlines of both countries flying between and beyond the other's territory. The United States has such agreements with dozens of countries worldwide, including EU members Italy, France and Germany. But while U.S. airlines can fly into EU countries from anywhere in the United States, European airlines can only fly into the United States from their home countries. The restriction helped derail a British Airways bid for KLM in 2000 because the Dutch carrier risked losing its rights to fly across the Atlantic from Amsterdam. Last November, the European Court of Justice declared such restrictions illegal because they favored airlines from one EU country over others. Airlines support the changes in the hope they can merge and overcome the industry's current economic turbulence. At present, Europe is home to more than a dozen national carriers. "Europe and the USA should now close ranks and establish a common regulatory framework which allows for a level playing field and growth opportunities for all EU and U.S. carriers," said Ulrich Schulte-Strathaus, secretary general of the Association of European Airlines. Andrew Cahn, director of government affairs for British Airways, said the move "will allow airlines in Europe to consolidate and meet the needs of their customers free of state control and intervention." In addition to boosting competition within Europe, de Palacio said the negotiations will also address opening up each other's domestic markets. At moment Washington applies tougher restrictions on ownership and connecting flights than Europe. The U.S. Congress is presently considering a plan that would allow forei= gn airlines to own up to 49 percent of a U.S. carrier, up from 25 percent now. De Palacio said the EU also would be willing to consider reducing its ownership restrictions. The commission said it would also seek to renegotiate ownership restrictions in agreements with other countries, such as Japan. "With many traditional carriers facing economic problems, it is important that they are given this freedom and greater access to international capital," de Palacio said. "The nationality clauses will therefore need to be changed to allow this possibility." =20 ---------------------------------------------------------------------- Copyright 2003 AP