British Airways shares plunged as much as 10 per cent today after the United States and Europe agreed an outline pact to boost competition for transatlantic flights, which the European Union's transport chief urged EU governments to endorse.
Transport Commissioner Jacques Barrot dubbed the "open skies" deal the most ambitious ever attempted and said failure to back it would create "a legal mess" in which he would be forced to take several nations to the European Court of Justice for refusing to give up bilateral aviation pacts with the United States.
"In the next few weeks, I will ask the transport ministers from around Europe to look hard at this agreement," he said in a speech in London.
"I hope we can go ahead. But I am not ready to predict the outcome," he said, adding that his US counterparts would also face opposition in Congress.
The so-called open skies deal would free up routes to more transatlantic carriers, hitting BA's dominant position and earnings, which rely heavily on transatlantic routes.
Currently, direct transatlantic flights from Heathrow are limited to British Airways (BA), Virgin Atlantic, United Airlines and American Airlines.