The United States and European Union (EU) have moved closer to agreeing on expanding aviation services and boosting competition on transatlantic routes.

Negotiators at the U.S. State Department-led Open Skies talks say they have made substantial progress on a new deal.

This will be reviewed by EU transport ministers when they meet next month. Europe has made its approval of the deal conditional on a U.S. proposal to ease some limits on foreign investment in American carriers, Reuters reported at the weekend.

European negotiators first want the deal to facilitate greater investment opportunities and wider access to important travel markets in the U.S. Daniel Calleja, the European Commission director general for aviation, described the agreement as a "significant step" and said chances for approval in Europe were good, if the ownership question moves "in the right direction".

Agreement on Open Skies has remained elusive for years. There has not been universal support among lawmakers, airlines and labour groups in the U.S. for further opening of the transatlantic market. If finally approved, the agreement will eliminate remaining restrictions on service and routes between European and U.S. destinations. It will also effectively remove fiercely protected competition barriers to London's Heathrow airport.

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