The United States and the European Union will open talks next week on liberalising airline routes across the Atlantic, an EU spokesman said last night - a move that could lead to huge global mergers in the airline sector.
This is the first time that the EU has negotiated an aviation deal en bloc, rather than as individual states. EU airlines - including Aer Lingus - hope it will lift regulatory restrictions that have hampered cross-border mergers in the past.
EU and US transport officials will meet in Washington next Wednesday and Thursday, accompanied by executives from some of the major airlines, which could see the regulatory landscape transformed by the so-called "open skies" talks.
Aer Lingus hopes to gain access to around 50 new routes in the US based on an agreement with giant US carrier American Airlines. The State-owned airline has obtained provisional agreement from the US airline to "code share" on up to 50 routes. They can go ahead if the EU and the US agree a new open skies policy.
The airline has been pressing the Minister for Transport, Mr Brennan, to alter a bilateral agreement with the US to allow the routes to go ahead. Officials from his Department have been told of the American Airlines link-up and its potential.
Currently such arrangements are not permitted by the EU-USA agreement. Under the "code share" arrangements, a passenger could fly using a single Aer Lingus ticket to one of the 50 US destinations, even though part or all of their journey would involve an American Airlines aircraft. The advantage of code share arrangements from the passengers' perspective is they can access destinations with one ticket and do not have to pay for separate flights.
In most cases, check-in and baggage are taken care off at the airport where the passenger first departs.
Both sides say they want an agreement covering all EU countries to replace the existing bilateral pacts on flying rights across the Atlantic that the United States has with EU states.
The chief US negotiator, State Department undersecretary Mr John Byerly, has said he wants a quick, limited "early harvest" agreement to replace existing government-to-government deals.
But EU Transport Commissioner Ms Loyola de Palacio will push for much more, industry sources said, including access to domestic flight paths within the United States, which are currently the preserve of US carriers.
US airlines, some of which are fighting for survival, will be less keen to liberalise so much, industry sources say.
The existing agreements were ruled partially unlawful by an EU court last year on the grounds that the bloc should be a single market and aspects of the deals infringed this principle. The 15 EU member-states gave Ms de Palacio a mandate to seek a wide-ranging deal following the court ruling last November.
One airline official said a successful wide-ranging deal could eventually open the way for mergers around the world.
An EU-wide "open skies" deal with the United States would remove that risk and be a boost to carriers such as Air France and Dutch airline KLM, which are considering a merger.
Air France has scheduled a board meeting for Monday, at which it is expected to approve the merger that would unseat British Airways as Europe's largest airline.
Alitalia - the French carrier's partner within the SkyTeam alliance, which wants to avoid being sidelined by an Air France/KLM partnership - has also scheduled a board meeting for Monday to discuss alliances.
KLM declined to say whether its board would meet.
The three boards cancelled their planned meetings at the last minute two weeks ago.
Air France chief executive Mr Jean-Cyril Spinetta said: "Things could go really fast." - (Additional reporting, Reuters)
