EU's Open Skies olive branch to US

The European Commission will launch a fresh push tomorrow to persuade the American government to open its air travel market to competition.

The last Open Skies talks ended in failure when US officials refused to allow European airlines to fly within America.

But in the next round of talks in Washington, the Commission will offer a new deal in an attempt to break the deadlock.

It will propose that European carriers be allowed to set up US subsidiaries to operate domestic flights. American carriers would be offered identical rights within Europe.

British Airways and Virgin Atlantic are understood to have privately expressed an interest in operating within the US.

The proposals, known as right of establishment, have the backing of Britain's Civil Aviation Authority, which is keen to broker a deal with the US.

Commission officials believe that the Americans might find the latest proposals palatable because employees working for a US subsidiary of a European company would be subject to America's labour laws.

While there is some optimism that the talks will be constructive, most officials involved believe there won't be a deal until after the American presidential elections.

A spokesman the UK's Department for Transport (DfT) said: "It may not be the best time to do a deal. We would rather wait until after the elections for a good outcome rather than agree an unsatisfactory one now."

However, Britain has yet to sign up fully to Open Skies as it is restricting access to landing slots at Heathrow airport. One well-placed source said that the DfT was waiting for the Americans to make the first move before offering freer access to the slots.