U.S.-Europe Open Skies Deal Signed

May 1, 2007
The agreement is designed to allow European and American airlines to fly any route between any city in Europe and any city in America.

WASHINGTON -- U.S. and European officials signed an agreement Monday relaxing limits on airline service between Europe and the U.S., enabling airlines that had been barred from flying some routes to do so next year.

The agreement, known as "Open Skies," is designed to allow European and American airlines to fly any route between any city in Europe and any city in America. The agreement, signed Monday at a State Department ceremony, goes into effect at the end of next March, the State Department said.

"With this agreement, the honeymoon in Paris, the business trip to Dublin, and family reunion in Naples will be cheaper, easier and within the reach of more Americans than ever before," Transportation Secretary Mary Peters said in a prepared statement.

The deal, long in the works, means more competition for the four carriers currently allowed to fly between the U.S. and London's Heathrow Airport, one of the world's busiest. British-based airlines British Airways PLC and Virgin Atlantic had enjoyed a joint monopoly along with U.S. carriers AMR Corp.'s American Airlines and UAL Corp.'s United Airlines over the lucrative trans-Atlantic routes.

European officials signed off on the agreement late March. Jacques Barrot, vice president of the European Commission for transportation, said in a statement that the agreement "will shake-up both the trans-Atlantic market and the European airline industry itself."

The agreement does not require the approval of Congress. Rep. James Oberstar, D-Minn., chairman of the House Transportation Committee, said in a statement that his committee will make sure that existing limits on foreign ownership of U.S. airlines are maintained.

Under the agreement, European investors are allowed to hold just under 50 percent of a U.S. airline, and potentially more if they have a 25 percent voting stake in an airline or less, the State Department said. Meanwhile, U.S. investors can invest in European airlines if they are majority-owned by Europeans.

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