The EU and the US launched the second round of 'open skies' talks today which could increase routes and lower prices for transatlantic flights, or even the world's first global airline.
This new round builds on an agreement that allows airlines to access any US city from any point in the EU and vice versa and which entered force in March.
It eliminated the need for some airlines to stopover at Shannon airport.
Britain has led critics of the earlier agreement and is calling for the abolition of US federal laws that cap foreign control of US airlines at 25% of their voting stock.
But the US Congress will not easily be persuaded to approve any such deal amid fears that US airlines would be the main takeover targets, said C Boyden Gray, the US envoy to the European Commission.
Catalyst for consolidation
British Airways sees relaxation of US ownership rules as the most crucial issue, allowing airlines on either side of the Atlantic to increase efficiency through mergers, said a BA spokeswoman.
'The agreement should act as a catalyst for the economic consolidation that the aviation industry so desperately needs,' she added.
European airlines also want greater access to the US domestic market with the right to sell tickets for flights between US cities.
Britain has warned it will exercise its right to terminate the Open Skies agreement if US barriers are not lowered during the current talks.
'The EU has agreed a process whereby that right will be exercised automatically, unless all member states agree unanimously not to do so, so the threat remains a very real one,' said a spokeswoman for the UK transport ministry.
The United States surprised EU negotiators on Tuesday by saying it would seek a wider deal by pledging to drop access restrictions for airlines from more than 60 nations.
British Airways has been among the first to capitalise on the existing Open Skies agreement with plans for flights to the United States from Paris Charles de Gaulle airport in addition to its traditional hub at London's chaotic Heathrow airport.
Ryanair CEO Michael O'Leary has hinted in the past that he might develop a spin-off airline that would offer transatlantic fares for as little as $12 (€8).
Meanwhile, rivals Air France and Delta Air Lines are planning to move on Heathrow in a joint venture they expect to generate €5bn a year.
