This week will witness the first bilateral air transport talks between the United States and the European Union. The outcome could remould the global aviation business with a concomitant shakeup of marketing alliances and allegiances.

For decades the US has dealt with transatlantic issues on a nation by nation basis, allegedly using its negotiating muscle to browbeat the smaller European states. Some of the latter have remained obdurate, notably the UK which has jealously guarded its take-off and landing slots at London’s Heathrow Airport – the world’s largest international air hub.

Unlimited US access to Heathrow has been one of the major sticking points in previous negotiations – and is likely to remain so. Currently only two stateside carriers use the hub: American Airlines and United Airlines.

Although both sides say they favor a broadscale, fast-track agreement, few seriously expect the talks to be anything other than a laborious step-by-step process. Especially given the sweeping internal revamp of the European Commission due in summer 2004, and the US presidential election in November of that year. Few involved expect an to see an agreement inside two years.

The first meeting in Washington on October 1 and 2 will set the agenda for the talkfest and a second round is pencilled-in for Brussels in early December.

“The purpose is to create a common set of rules between the EU and the US,” says European Commission director for Air Transportation Michel Ayral, head of the EU delegation.

John Byerly, US deputy assistant secretary for Transportation Affairs, agrees: “We'd be delighted to sign a comprehensive open skies treaty with Europe today,” he enthused.

But the question that will trigger much blood, sweat, toil and tears is: on whose terms? Washington has sixty such pacts worldwide, including eleven of the 15 EU member states. The latter treaties have been ruled illegal by the EU on grounds that they violate its founding principle: that all its citizens should have equal access to the common European market.

Agreement, when reached (when, not if; later rather than sooner, onlookers believe) will have a profound effect on global air travel, given that the US and EU in aggregate account for over 40% of the worldwide market.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff