European negotiators pursuing an Open Skies deal with the USA have privately conceded that a new air services bilateral is unlikely to be signed before the fourth quarter of this year.

Both sides had hoped to sign a deal at this week's EU-US summit in Newmarket-on-Fergus in Ireland, but talks broke down last week after the US team objected to a European demand to link an initial deal with further liberalisation talks. Sources within the EC now expect a communiqué‚ to be issued at the summit, but foresee no further substantive developments until after the US parliamentary and presidential elections in November.

Several European Union countries had been lobbying for an initial agreement with the USA, legalising the concept of cross-border EU carriers and permitting further consolidation in the European market. US negotiators have consistently refused to discuss cabotage, as it would be too politically sensitive. The USA had been expected to agree to a "mini deal" coupled with a binding agreement to liberalise the US domestic market, but it is understood that negotiators from the Department of Transportation have been told not to agree to any preconditions that could lead to cabotage. In June, the USA hailed as a breakthrough the concept of "indirect air carriers", with European carriers able to sell capacity on their US partners' services. Talks have also stumbled over EU demands to abolish US government "Fly America" rules.



Source: Flight International