U.S., EU pledge to strike 'open skies' agreement

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U.S., EU pledge to strike 'open skies' agreement  =

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Wednesday June 25, 4:51 PM EDT =


By John Crawley

WASHINGTON, June 25 (Reuters) - The United States and Europe pledged on W=
ednesday to further liberalize transatlantic aviation, but experts said o=
ld obstacles are still prominent despite big changes in how these talks a=
re handled overseas.

The two sides have been laying the groundwork in recent weeks for formal =
negotiations on removing air travel restrictions. Last week, one senior U=
=2ES. official held out the prospect of a quick deal on non-contentious i=
ssues. Negotiations would then continue on more complex topics.

Informal meetings are taking place at the Transportation Department this =
week with formal talks to begin in early fall. No specific dates for thos=
e negotiations have been announced but the first-round will be held in Wa=
shington.

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Both sides heralded the benefits of broader air liberalization without me=
ntioning some intractable differences, including those that hampered talk=
s with Britain in recent years.

"Today, we are launching negotiations on a comprehensive air services agr=
eement, better known as 'open skies' that will benefit our consumers, our=
 airlines and our communities, U.S. President George W. Bush said at a Wh=
ite House news conference with officials from the European Union.

"This will change all the industry of aviation transport, and will provid=
e better service, lower price and more choice for the 11 million people w=
ho cross the Atlantic every year and even more in the future," Romano Pro=
di, president of the EU's executive body, the European Commission, said a=
t the same briefing that centered on broad EU-US relations.

COURT RULING OPENS WAY

The United States had negotiated 19 separate "open skies" agreements with=
 European nations, including non-EU members. The U.S. government was unab=
le to strike comprehensive deals with Britain, Greece, Spain and Ireland.=


Some of the 15-member EU states have wanted for years to negotiate a sing=
le treaty, but it was not until a European court decision last year opene=
d the way for those talks to proceed.

Aviation industry consultants and other experts acknowledge that many tou=
gh issues remain even though the negotiating landscape has changed and th=
at the industry's global financial troubles may weaken some barriers.

For instance, the United States believes that some European environmental=
 regulations that limit flights are too restrictive.

Another obstacle has been Britain's refusal to expand access to London's =
Heathrow airport beyond the limited number of flights available to only t=
wo U.S. airlines. Not only was an "open skies" deal elusive but differenc=
es over Heathrow scuttled attempts in recent years by American Airlines (=
AMR) and British Airways (BAY) to cement a major marketing alliance.

Europeans would like the United States to ease limits on international ow=
nership of U.S. carriers, a change that would need approval from Congress=
=2E While Transportation Secretary Norman Mineta wants to boost the ceili=
ng from 25 percent to 49 percent, some lawmakers are concerned that too m=
uch foreign financial influence would challenge U.S. interests.

Early agreements could be struck on reducing European red tape for U.S. c=
arriers flying overseas routes, standardizing financial and tax procedure=
s, and eliminating hurdles for broadening code-share agreements.

"Nothing is certain," said Mark Gerchick, an aviation consultant and form=
er senior Transportation Department official. "It's going to take time, b=
ut it has moved beyond the realm of pure rhetoric." =



=A92003 Reuters Limited. =


Roger
EWROPS

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