Talks on a transatlantic open skies agreement face a crucial test today, amid growing concerns that the European Union and the US will be unable to bridge their differences.
Many had hoped that such a deal would throw open one of the most heavily regulated transatlantic sectors, increase competition and pave the way for mergers between US and European carriers.
EU transport ministers, meeting in Luxembourg today, will have to decide whether to settle for a quick agreement that falls well short of their original ambitions or to continue talks.
They face strong pressure from the EU aviation industry, which argues that the US offer on the table is lopsided and gives the Europeans little access to the American market.
Others fear that snubbing the US proposals now would leave little chance of reaching an agreement until long after the US presidential elections in the autumn.
It is unclear whether the ministers will take a formal position. At the very least, their discussion will clarify the negotiating position of the European Commission, which has taken the lead in the talks with Washington.
The Commission is thought to favour signing an interim agreement within the next weeks while committing the US to further and more substantial talks later.
Crucially, the interim deal would solve the problem created by a European Court of Justice ruling invalidating bilateral aviation deals between individual European countries and the US. For the time being, these deals remain in place, but the Commission has said it will force governments to revoke the agreements if there is no EU-US deal soon.
The consequences of such a move are hard to predict, but by removing the legal basis for much of transatlantic aviation, the Commission would raise the stakes dramatically.
"We have to take action in the very near future because these agreements are illegal," one Commission official said yesterday.
The interim deal the Commission has in mind would allow carriers to fly from anywhere in the EU to anywhere in the US.
This would remove an important obstacle to cross-border mergers in the Union, because under the old regime combined groups risked losing the take-off and landing rights granted under bilateral agreements.
The Minister for Transport, Mr Brennan, has said he will not sign up to any agreement that involves the immediate ending of the Shannon stopover. The Government wants a breathing space of several years to phase it out. Half of all flights between Ireland and the US must stop at Shannon.
- (Financial Times Service)
