US and UK meet to break `open skies' stalemate

THE BRITISH and United States governments are to hold "talks about talks" this week in an attempt to diffuse the simmering row over flights between the two countries.

Transport officials will meet on Thursday and Friday but no airlines will be present.

Airlines are eager for the two sides to sign an "open skies" agreement that would allow greater competition to the US from Heathrow. At present only two airlines from each side -- BA and Virgin and American Airlines and United - can operate that route.

The last talks ended abruptly in October when the American delegation stormed out. This stymied BA's hopes of cementing its alliance with American Airlines.

A spokesman from the British Department of Transport said the Government had kept open "informal channels of communication" after the talks collapsed but said that neither side had made any concessions.

Britain is concerned that opening the door to a range of US carriers could spark a price war, an attitude which the Americans see as harmful.

"These are exploratory talks to see if there is ground from which to move on," said the DoT spokesman.

The UK delegation will be led by Tony Baker, director of international aviation negotiation.

Analysts expect that any deal would be phased in over four to five years.

British Midland has applied for licences to run on 10 routes to the US.