EU opens door to airlines shake-up

The European Commission yesterday won the right to start talks with the United States on airport landing rights, in a move destined to lead to a wholesale shake-up of transatlantic aviation.

The decision, taken by EU ministers in Luxembourg, ends a lengthy political and legal battle between national capitals and Brussels, and paves the way for a new round of mergers in the airline business.

At present 11 EU countries have bilateral deals with the US which restrict the airlines that can use European airports to fly across the Atlantic to national carriers. However, such deals were declared illegal by the European Court of Justice last November in a long-running case against eight countries including the UK.

The European Commission will now try to negotiate a deal with the US under which EU carriers can offer transatlantic services from any European country.

The Government won one concession under which the current bilateral deal with the US will stand until a new EU arrangement is clinched. But the climate was also changed by the massive financial support given by the US to its carriers after 11 September 2001. The Commission has convinced EU member states that it would have more clout to combat the granting of subsidies if it negotiates on behalf of all 15 countries.

The EU's transport commissioner, Loyola de Palacio, said she hoped to start negotiations with the US "within a month".

Yesterday's move was welcomed by some large carriers which argue they are at a disadvantage to their American competitors. They say that, while US airlines can fly into EU countries from anywhere in the States, European airlines can only fly into the US from their home countries. The restriction helped derail a British Airways bid for KLM in 2000 because the Dutch carrier risked losing its rights to fly across the Atlantic from Amsterdam.