View from City Road: Open skies and closed minds

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The Independent Online
Today Britain and the US will resume their efforts to agree an 'open skies' pact across the Atlantic after a four-month delay while the Clinton administration bedded in.

No one who has followed the protracted talks over the past 12 months seriously expects the respective sets of negotiators to achieve any breakthrough as they settle down to three days of haggling in London over the existing, highly restrictive treaty governing air services between the two countries.

The position of each side is well established. Britain is not prepared to allow American carriers further access to the UK market until the restrictions on foreign ownership of US airlines are eased - which would require the approval of Congress.

The US is equally implacable in insisting that it will not lift these restrictions without the immediate and prior guarantee of increased flying rights into, through and beyond the UK, starting with more access to Heathrow.

It was this stand-off that scuppered attempts to strike a deal in the dying days of the Bush administration. This time, however, things are slightly different. Last year the big three US carriers - American, United and Delta - presented a common front. Four months on, they are divided.

American Airlines says it will not be satisfied with anything less than complete liberalisation and warns darkly that in the absence of an agreement the US may well terminate the present Bermuda 2 treaty.

United Airlines, on the other hand, would probably be bought off provided it was granted rights to begin flying between Heathrow and its hub airport, Chicago.

Since the existing treaty favours British carriers more than their American counterparts the incentive, from the UK point of view, to renegotiate it is limited. With the three US carriers at odds, there is every opportunity to divide and rule.

Meanwhile, British Airways can sit pretty in the knowledge that competition from the real threat will remain inhibited for some time.