The U.S. and European Union Friday agreed on a draft deal to liberalize transatlantic aviation that continues to prohibit overseas control of domestic carriers. The decision to free up transatlantic air travel is certainly a major breakthrough the EU said could be the basis ‘for a reinvigorated transatlantic relationship.’ After negotiations in Brussels, EU Transport Commissioner Jacques Barrot has stated that the two sides had overcome an impasse over airline ownership. Both European and U.S. airlines will be limited in making acquisitions in each others’ markets.
The preliminary agreement envisages abolishing restrictions on trans-Atlantic air routes, and aimed at increasing the number of flights, along with lowering fares. The accord would allow European airlines to fly into the U.S. from anywhere in the bloc, which has 27 member nations. Earlier European airlines could enter the U.S. only from their home country.
On the other hand, restrictions on U.S. airlines flying to Europe would be relaxed, effectively removing obstacles that now allow only two U.S. airlines, American and Delta, the right to fly into London Heathrow Airport.
Another crucial aspect of the deal enables European companies to now hold up to 49.9 percent, more than 50 percent in few circumstances of U.S. airlines, up from the present 25 percent level. A provision of the deal could help Richard Branson’s Virgin Group Ltd. win regulatory approval needed to launch a U.S. subsidiary, Virgin America Inc.
