United Airlines Boss Urges EU to Back Open Skies Deal

THE head of America's United Airlines is backing an "open skies" deal that would pit it against British Airways and Virgin Atlantic in intense competition as Tony Blair prepares a last-ditch effort to exclude Heathrow airport from any deal.

Glenn Tilton, president, chairman and chief executive of the second-largest US carrier, urged EU transport ministers to back the "open skies" deal between the United States and the EU when it is reviewed on Thursday.

He hailed it as the most important air travel deal in decades.

However, Britain strongly opposes the deal as it stands.

Under pressure from BA chief Willie Walsh, Transport Secretary Douglas Alexander has voiced his concern about risks to BA and Virgin.

Blair is is expected tomorrow to urge President Bush to back a compromise arrangement under whichAmerican airlines would only gain access to Heathrow when the US opens its domestic market to foreign carriers and liberalises its airline ownership rules.

As it stands, the deal would open Heathrow to more airlines taking on the two British carriers at their home base.

But Tilton today said the pact would "benefit consumers on both sides of the Atlantic, bringing new competition to the world's largest aviation markets".

He added: "The US is ready to sign, but some in Europe are urging the EU council of transport ministers to reject the agreement, arguing that it is unbalanced in favour of the US."

Tilton rejected British criticism, saying the deal already represents an important compromise. He argues that United Airlines and American Airlines, under current arrangements the only foreign carriers allowed to fly from Heathrow to the US, would face the same competition as BA and Virgin.

"We are prepared to accept the challenge of new competition in exchange for the long-term benefit of maintaining momentum toward international aviation deregulation," Tilton said.

"We are prepared to compete on a level playing field because reliance on protection from competition is not a strategy for lasting commercial success."

Britain is expected to be odd man out at the European Council-meeting on Thursday, with Blair's pitch to Bush by telephone seen as a test of the socalled "special relationship".

While BA continues to fight the deal, Virgin appears to have conceded defeat and is seeking ways to exploit the pact with transatlantic services from Paris, Amsterdam and Frankfurt.

But BA argues that in giving up Heathrow as a bargaining chip, the EU will find it impossible to force the US to open its own market.

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