Open skies battle to be renewed

British and US negotiators will begin a fresh round of talks in Washington on Wednesday in a bid to break the deadlock over an open skies agreement across the Atlantic.

A breakthrough in the long-running talks would open up Heathrow to all US carriers and is vital if British Airways and American Airlines are to get the go-ahead for their transatlantic alliance.

However, industry observers believe it may be difficult for the two sets of negotiators to make headway over the issues that separate them.

The US is demanding fifth freedom rights for its carriers - the right to land at a UK airport, pick up passengers and fly on to a third country. In return, the UK wants cabotage rights in the US which would enable UK carriers to operate domestic services within North America.

So far Britain has vigorously resisted the US demands even though fifth freedom rights have been a feature of every other open skies deal it has so far concluded with other European countries such as Germany and the Netherlands.

An industry observer said yesterday: "I cannot see the US negotiators budging from their insistence on fifth freedom rights. This has formed part of the template for every open skies deal they have done so far and I can't see them changing things this time. If there is no open skies deal then there is no BA-American alliance."

BA opposes the idea of US carriers being allowed to fly to third countries from Heathrow because it would enable them to start competing not just on European routes but on services to long-distance destinations.

Virgin Atlantic, meanwhile, is pressing for cabotage rights insisting it could launch low-cost services within months if given the opportunity.