UK set to agee new transatlantic flights dealMove should drive down air ticket prices

22 March 2007

 

A plane in the sky

Britain is expected to agree today to an air travel deal which will open up transatlantic routes and potentially push down ticket prices.

The government was initially opposed to the deal and warned it was too one-sided and could harm BA and Virgin.

However, Transport Secretary Douglas Alexander is now expected to vote with the rest of the EU for a new ‘Open Skies’ deal with the US.

But Mr Alexander is expected to push for EU agreement to scrap the deal within two years unless Washington agrees to make the deal fairer for European airlines.

Heathrow route

Currently the Heathrow to New York route is restricted to just four airlines - BA, Virgin, American Airlines and United Airlines.

But the new agreement will allow European airlines to run transatlantic flights to any American city from any EU country and not just their home country.

In return American carriers will have free access to European airports.

The key to the deal is opening up Heathrow, which accounts for more than 40 per cent of all flights from Europe to America.

No-frills airlines

US airlines as well as European companies such as Air France and Lufthansa would all benefit from the move.

No-frills airlines such as Ryanair and EasyJet could get also access to the lucrative Heathrow route - potentially pushing prices down.

However, the current deal would still prevent European carriers competing on almost all American domestic air routes - but it allows US companies to offer services between European countries.

Virgin Atlantic said it wanted nothing short of full competition, allowing any airline to fly from and to anywhere in the US and EU.

But even though it opposes the government's support of the new plans, the company has already started making plans to take advantage of the likely EU-US deal - expanding in Europe by flying to New York daily from Frankfurt, Paris, Zurich, Milan, Madrid and Amsterdam.

Which? travel spokesman, Bob Tolliday, said: 'You might want to think about a holiday to America next year. This long-awaited deal will definitely be good for the consumer. It's likely to open up the USA to the travelling public in a completely new way.'