Britain 'open skies' deal with US due this summer as negotiators agree key terms

Virgin planes parked next to each other
Virgin planes parked next to each other

Britain is set to agree an ‘open skies’ agreement with America this summer that will keep planes flying between both countries after Brexit, The Daily Telegraph can reveal. 

Four sources in London and Washington briefed on the talks have said a deal is “close” after consensus was reached on the biggest issues up for debate.  

UK and US negotiators have agreed that major transatlantic airlines must be covered despite them being foreign owned - a break with the normal rules. 

That means flights from Virgin, Norwegian Air and British Airways owner IAG - all majority-owned outside of the UK and US - would continue after Brexit. 

Britain has also offered in principle to include its overseas territories in the agreement, something not covered by the current EU-US 'open skies' deal. 

A fresh round of talks will take place next month with officials and well-placed industry sources increasingly confident an agreement is within reach. 

“We could get a deal right now if we wanted to. We could sign on the dotted line,” said one UK Cabinet source, adding Britain was mainly holding for extra concessions.

An agreement, which negotiators believe can be announced before the March 2019 Brexit date even if not implemented, would be a major victory for Theresa May. 

It would likely be held up as proof that some of the complexities of the European Union can be resolved, despite the Cabinet being locked in splits over customs arrangements. 

It would also provide evidence that Donald Trump, a supporter of Brexit unlike his predecessor Barack Obama, will make good his pledge to help Britain as it leaves the EU. 

Open skies agreements effectively allow airlines and the free market to set prices for flights to and from countries, rather than the governments of those nations. 

Britain will fall out of 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. 

Some issues remain. British negotiators are seeking more comprehensive protections for possible new airlines to enter the market to boost competition. 

They are concerned that the US airline industry’s labour unions are lobbying to make it harder for potential rivals to get financing from international capital markets. 

Britain also needs to separately negotiate an “open skies” agreement with the EU, which is critical for US airlines as half of all Americans who fly into the UK travel onto 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.

Separate “open skies” deals with other countries also need to be negotiated by Britain to cover air travel after Brexit. 

Sean Kennedy, the senior vice president of global government affairs at Airlines For America – a trade association which represents the country’s largest airlines and has contributed to talks – expressed optimism. 

He told The Daily Telegraph: “Seamless air travel between the U.S. and the UK needs to be a Brexit priority. There has been ongoing engagement between both governments to come to a quick resolution, and we are confident that a deal is within reach.”

It is unclear how Mrs May’s proposal of a transition phase during which Britain could retain some benefits of EU membership up to 2021 would affect any new open skies agreements. 

The proposal is yet to get a formal response from Brussels and the details are part of Brexit negotiations, due to come to a head later this year. 

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