US, EU reach long-sought accord to liberalise air traffic

The United States and the Euro-pean Union have achieved a break-through in talks on a long-sought agreement to liberalise the trans-Atlantic air transportation market.

US and EU negotiators initialled the deal in Brussels, Belgium, last Friday, ending a controversy about foreign control of US airlines that threatened to unravel the pact.

The Bush administration has welcomed the tentative agreement.

US transportation secretary Mary Peters said it "will offer more choice and convenience to American consumers, promote new growth in our aviation industry and support our continued economic expansion".

US State Department spokesman Sean McCormack called the accord "potentially very important" for the airline industry and millions of pas-sengers who fly between the US and EU countries.

The US-EU "open skies" agreement would provide for a 34 per cent increase in trans-Atlantic air passenger traffic, generate up to $16 billion in economic benefits over five years and create a total of 80,000 new jobs on both sides of the Atlantic, according to a March 2 European Commission news release.

Bilateral open skies agreements give airlines in both countries the right to operate air services from any point in one country to any point in the other, as well as to connect those flights to points in third countries.

If approved by EU transportation ministers at their next meeting in March, the pact could be signed during the US-EU Summit in April in Washington and go into force in October, according to the US State Department.

The European Commission said new provisions in the agreement would allow the EU to restrict US investment in EU airlines. But other details on ownership, investment and control provisions have not been released.

The deal would grant anti-trust immunity to US and EU carriers to facilitate airline alliances, give EU airlines rights to operate between the US and non-EU European cities and allow people travelling on US government funds to use EU carriers. Now, a 1958 law obliges all US government-funded travellers to fly on US airlines only.