EU, US Want Friendlier Skies

The European Union and the United States on Monday re-launched long-stalled talks on opening up the huge transatlantic air market to greater competition, aiming to strike a deal by the end of the year. The latest round of "open skies" talks are expected to last all week in Brussels and to be followed by another round in Washington for the week beginning on November 14. The aim is to do away with existing patchwork of bilateral agreements between various EU members and the United States and set up one system regulating transatlantic air transport. In June 2003, EU member states gave the European Commission a mandate to negotiate a treaty with Washington after the European Court of Justice deemed that parts of the existing bilateral agreements breached EU rules. The offending parts of the bilateral accords were so-called "nationality" clauses, under which European airlines were allowed to operate transatlantic flights only from their home countries. A study commissioned by the European Commission has calculated that an agreement with the United States would reap benefits worth as much as 4.16 billion euros ($5 billion) per year to consumers. Dumping the nationality clause in the current agreement is also expected to lead to a wave of mergers in the industry, which remains much more fragmented along national lines compared to other sectors.