US agrees to open-skies deal

Pressure was increased yesterday on Britain to settle its differences with the United States on finalising a new bilateral aviation agreement after Washington signed a sweeping liberalisation agreement with the German government.

The "open-skies" pact promises to end restrictions on passenger and cargo flights between Germany and the United States, granting the airlines of each country access to all destinations in the other and removing other restrictions on capacity, services and code-sharing arrangements.

It remains contingent, however, on the US government agreeing to grant immunity from fair-trading laws to Lufthansa and United Airlines, which plan to extend their already existing code-sharing partnership. Such immunity has already been extended to Northwest Airlines and KLM of the Netherlands.

"The new agreement will open the skies over the Atlantic for German and US airlines and guarantee them the leeway they need to succeed on the transatlantic aviation market," said Germany's Transport Minister, Matthias Wissmann. Both sides hope to confirm the deal in time for a visit to the White House in April by the German Chancellor, Helmut Kohl.

Attempts by Britain and the US to strike a similar open-skies deal have so far met only frustration. The European Commissioner for Transport, Neil Kinnock, is against member states negotiating bi-lateral packages, and wants a collective agreement.

The latest UK-US round of talks were aborted by the US side last autumn. A deal with Germany could harm Heathrow's position.

Last month, the Foreign Secretary, Malcolm Rifkind, appealed for a quick resumption of the talks with the United States.

Included in the deal, for example, is a provision to allow carriers to pick and drop off passengers at points beyond the US and Germany. Thus Germany could become a hub for flights by US airlines to Asia. German carriers, meanwhile, would be allowed to fly into the US from other third countries.

A separate "goodwill" package will take effect almost immediately while confirmation of the full deal is pending. This will, for example, allow US airlines to add 20 flights a day to its German schedules.