A revised UK-US “open skies” pact is expected to be sealed to keep aircraft flying on key transatlantic routes after Brexit.
A deal is “close” after consensus was reached on the biggest issues up for debate, the Sunday Telegraph reported, quoting four sources in London and Washington.
“UK and US negotiators have agreed that major transatlantic airlines must be covered despite them being foreign owned – a break with the normal rules,” according to the newspaper.
“That means flights from Virgin, Norwegian Air and British Airways owner IAG – all majority-owned outside of the UK and US – will continue after Brexit.”
The UK has also offered in principle to include its overseas territories in the agreement, something not covered by the current EU-US open skies agreement.
The EU-US open skies deal was brought in a decade ago to provide uniform rules for airlines and airports. It has led to an estimated 18% increase in transatlantic traffic from 2006 to 2016.
It allows any EU airline and any US carrier to fly between any point in the European Union and any point in the US.
The agreement also effectively allows the free market to set the price and number of flights to and from countries, rather than the governments of these nations.
But the hitch arose when US negotiators offered only a basic bilateral agreement for when the UK quits the EU next year.
Standard agreements usually require airlines to be majority owned and controlled by firms from their home country.
But both BA and Virgin Atlantic do not fall into that category, prompting fears flights could be affected.
Normally landing rights for bilateral deals will only apply to a fixed number of flights per week to a fixed destination.
A fresh round of talks is expected to take place next month with officials and industry sources increasingly confident an agreement is within reach.
“We could get a deal right now if we wanted,” said one UK cabinet source, adding that Britain was mainly holding on for extra concessions.
An agreement, which negotiators believe can be announced before the March 2019 Brexit date even if not implemented, would be major victory for the British government.
Britain will leave the EU-US open skies deal the day after Brexit, meaning flights between America and the UK would be grounded unless an agreement is reached.
Separately, the UK also needs to negotiate an “open skies” deal with the EU, which is critical for US airlines as half of all Americans who fly to the UK travel on to the continent.
Talks with Brussels have yet to progress on such a deal given the impasse on wider Brexit issues such as customs arrangements and what happens on the Irish border.
“Nothing has been finalised,” said a US State Department official.