US suprises EU with global airline ownership plan

By William Schomberg

BRUSSELS (Reuters) - The United States proposed a deal on Tuesday to sweep away a global "spider's web" of airline ownership rules, taking the EU by surprise as it seeks a transatlantic deal for its airlines to buy their U.S. rivals.

U.S. Deputy Assistant Secretary of State for Transportation Affairs John Byerly said Washington had an open mind on Europe's long-standing demand to ease American restrictions on foreign ownership of U.S. airlines.

But Byerly, the chief U.S. negotiator in the "open skies" talks with the EU, said Washington would seek a far wider deal by pledging to forgo access restrictions on airlines from more than 60 nations, based on the nationality of their owners, a deal which could be expanded to other countries in the future.

Such a move would involve "dismantling the sticky spider's web of restrictions in bilateral aviation agreement that form a huge impediment to expanded cross-border investment in, and management of, airlines around the world," he said in a speech.

Under those rules, which are starting to be relaxed, a country allows access to airlines from third countries only if they are owned and controlled by nationals of that same country, something that has impeded cross-border airline takeovers.

The United States and the EU will open talks on Thursday in Slovenia on a second phase of the liberalisation of the transatlantic aviation market, known as "open skies."

DIFFERENT EU FOCUS

The EU's chief negotiator said he was surprised by the U.S. proposal to broaden the liberalisation talks.