Agreement on "open skies" finally reached

A new agreement which promises "open skies" between Europe and the United States has been signed. This should mean more competition on flights across the Atlantic.

After years of discussion a deal has been struck by the European Union's Transport Commissioner Jacques Barrot and his US counterpart Mary Peters, that allows any EU-based airline to fly from any city within the EU to any city in the US, and vice versa.

Jacques Barrot said: "We have an opportunity to unlock major benefits on both sides of the Atlantic. In economic terms, this unprecedented agreement would represent a step change - it could be worth up to €12 billion in economic benefits and up to 80,000 new jobs."

But under pressure from the UK government the plans won't actually be introduced until March 2008 as questions were raised about American regulations which restrict non-US airlines from operating domestic routes in America, for example, blocking a US-based but European owned airline from offering services between New York and Los Angeles.