WTM: US is reluctant to deregulate air traffic

The deal to deregulate air traffic between Europe and the US is in danger of collapse due to US reluctance to open skies at home, according to a leading airline executive.

Virgin Atlantic chief executive Steve Ridgway warned: “Phase one of the open-skies deal is flawed and it could be dismantled if the US market is not opened up.”

Services between the US and Europe will be liberalised at the end of March, following a deal earlier this year.

Traffic to the US from Heathrow will be opened to any carrier with slots at the airport – ending the current restriction on services to four airlines – and carriers will be able to fly from anywhere in Europe to anywhere in the US.

US carriers will also be able to fly within Europe – perhaps flying into Heathrow and then on to Milan or Athens. However, the US has refused reciprocal rights to European airlines and the UK Government has warned it will withdraw access to Heathrow if further talks do not widen the agreement.

Speaking at an Airline Head-to-Head seminar at WTM yesterday, Ridgway said: “We want to be able to fly within the US and we cannot, when US carriers can fly within Europe. It is anachronistic and the deal could be at risk.”

Virgin Atlantic owns a part-share in Virgin America, launched in August after a series of regulatory delays, but as a non-US carrier is also barred from taking a controlling stake.

Ridgway added: “The US aviation industry is hardly a success story.”

US airlines endured five years of heavy losses after 2001, only returning to collective profit this year. Eight US carriers went into bankruptcy protection or ceased to fly in that time.

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