BA, Virgin Don't Like EU-US 'Open Skies' Deal

British Airways and rival long haul carrier Virgin Atlantic yesterday reacted angrily to the terms of a provisional 'open skies' deal between the European Union and the US, which could be approved later this month.

Prospects for the creation of an Open Aviation Area between the EU and US improved on Friday when negotiators from both sides announced a tentative agreement had been reached in Brussels.

The deal will be voted on by EU Transport Ministers on March 22, which, if approved, would give Continental - which operates double daily services from Birmingham to New York - Delta and Northwest access to Heathrow airport. If that happens, the deal would be in place from October 28.

As part of the deal, European airlines would be allowed to make transatlantic flights from any nation to the US and not just their home country. However, the worry for many is that the deal favours US carriers, and that UK carriers would have to give up prime-time landing and take-off slots at Heathrow.

Should the deal go through, it is thought BA and Virgin will lose their valuable protected position at Heathrow and expose their most profitable areas of business to stiff competition. As such, BA has confirmed it will lobby on the issue, saying the deal is not good for UK aviation, while Virgin called the agreement a missed opportunity.

"We do not believe this is a good deal for Europe or the UK," said a BA spokeswoman. "We have reached a dead-end rather than a pathway to a true open aviation area."

In a statement, Virgin Atlantic chief executive Steve Ridgway said: "Both sides in the open skies debate have a real opportunity to create history and agree a long-lasting transatlantic deal which benefits consumers globally, through greater choice and flexibility.

"Such an agreement could act as a template for removing the shackles of regulation on the aviation industry in other markets worldwide.

"The Council of Ministers need to look behind any rhetoric and carefully analyse whether these fresh proposals fulfil the clear rational of achieving genuine and meaningful 'open skies' across the North Atlantic. We continue to watch events closely and await the meeting of EU Transport Ministers at the end of this month with interest."

BA and Virgin are not alone. American Airlines and United are also allowed to fly from Heathrow to the US and they could also suffer from increased competition.

According to the EU, a new deal would boost transatlantic passenger numbers by 26 million, create 80,000 jobs, and provide pounds 8.1 billion of economic benefits. The transatlantic airline market is worth some pounds 9.3 billion.

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