EU, U.S. open new stage of "open skies" talks May 15

By Ingrid Melander

BRUSSELS (Reuters) - The European Union and the United States will kick off talks on further liberalization of transatlantic air traffic on May 15, the EU's top transport official said on Friday.

The first phase of the "open skies" agreement comes into force on Sunday and allows carriers to access any U.S. city from any point in the EU, and vice versa.

European airlines have complained this deal unfairly favors U.S. rivals and EU states have threatened to scrap it if Washington does not agree by 2010 to a second phase allowing foreign airlines to buy more voting rights in U.S. carriers and permitting them to run domestic U.S. services.

"We'll be commencing stage two negotiations on May 15 in Ljubljana (Slovenia)," EU Transport Commissioner Jacques Barrot told a news conference.

"It will aim to achieve full liberalization in traffic rights, new possibilities for investments by European companies in the United States and for U.S. companies in Europe, measuring the effect on the environment and constraints on exercising traffic rights, access to transport programs financed by the U.S. government, and leasing aircrafts with crew," Barrot said.

"In the long term we want to achieve a completely open skies agreement," he said.

Barrot said the possibility of withdrawing from the deal if there was no progress on the second stage by 2010 was more a threat than a likelihood.

Sunday's move was "a revolution in the transatlantic skies", that would strongly boost air traffic, Barrot said, expecting 25 million extra passengers over the next five years, on top of the current average of about 50 million passengers per year.