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EU Court Says Members' 'Open Skies' Deals Illegal

In a decision which could have broad ramifications for transatlantic air travel, the European Court of Justice in Luxembourg ruled on Tuesday that bilateral "open skies" agreements between EU member states and the United States are illegal.

The EU filed suit against Austria, Britain, Belgium, Denmark, Finland, Germany, Luxembourg and Sweden four years ago after the countries refused to let the European Commission negotiate a single EU-wide deal with the U.S. and went it alone. The agreements with the U.S. regulate airline fares, access to crucial routes and landing slots and computer reservation systems for both American and European carriers. In its ruling, the court said those deals can only be negotiated by Brussels.

The decision is likely to provide legal footing for the EU's ambition to negotiate a full "open skies" agreement with the United States that would permit unlimited access to the U.S. market by all European carriers and also ownership of U.S.-based carriers by European firms. The initiative is supported by major European airlines including Richard Branson, whose attempts to expand his Virgin Express budget carrier into the U.S. have been thwarted by American regulations barring foreign ownership of domestic airlines.