British Airways chairman Martin Broughton has urged the EU Transport Council not to sell Europe short but to keep its sights high and push for a new aviation treaty with the US that can change the future not cement in the past.

He made his comments in a speech in London on March 5 at an industry conference called 'Turbulent Times: Regulation, Security and Profitability in the Airline Industry'.

The conference comes after the end of talks between the EU and the US which recommended a new draft aviation agreement that will be considered by the Transport Council later this month.

Martin Broughton said the draft agreement was based on a US open skies model which was a 'template designed to bolster US interests' that offered 'miniscule concessions dressed up as significant breakthroughs'.

The draft agreement is significantly imbalanced in favour of the US, and is no different in economic terms to deals previously rejected by the Transport Council in June 2004 and November 2005.

Far from a step towards truly liberalising aviation it was more likely to be a 'dead end' that would put back the prospect of a real breakthrough for many years and set the US model of open skies in concrete.

"Once the US have achieved their prime negotiating objectives of achieving an open skies deal, its motivation to liberalise further will evaporate," he said.

At the heart of the US model are unlimited traffic rights for US airlines to fly not just between the US and the EU, but onwards into the EU single market and beyond to the rest of the world.

But access to the US domestic market, the biggest in the world, remains closed to EU airlines, and the opportunities for them to fly beyond the US are limited.

What is more, the Fly America programme, which reserves US government and government funded traffic for US airlines only, has been maintained. The only concession that the US were able to make was the derisory one of allowing EU airlines to carry government traffic on routes with less than 60 passengers a year.

"In aggregate these crumbs don't come anywhere near balancing up the inherent imbalance in the open skies model," Mr Broughton added.

"The commission is putting its legal obligation to get the US to recognize the EU single market ahead of the EU's economic interest.

"BA supports the commission's mandate to negotiate not an open skies deal but an open aviation area based on the model of the EU internal aviation market," he said.

The key difference is the issue of relaxing the regulations surrounding the ownership and control of US airlines. The US negotiators had ruled this out, however, by refusing to consider any item that would require the endorsement of Congress.

The negotiators had been left to 'creatively scrape the barrel by including existing US policy on ownership limits and franchising into the draft agreement'.*

Implicit in the Commission's mandate is the freedom to offer 100 per cent ownership and control of EU airlines to US interests so long as it is reciprocated. But only Congress can deliver what the EU has been mandated to negotiate, so ultimately the discussions will have to go to Congress, he said.

"Chancellor Merkel of Germany, the current president of the EU, has recently proposed to President Bush that the EU and the US should form a transatlantic economic area, a single market in which the regulatory barriers to the movement of people, goods and capital across the Atlantic would be minimised.

"A transatlantic open aviation area could represent an important component of such an agreement. Settling for a US model open skies deal now would be selling Europe short.

"The German presidency and the rest of the council must not be satisfied with a bad deal. So my message to the council is to continue to keep its sights high and push the negotiators to deliver a deal that can change the future, not cement in the past," he said.

* Note: Foreign ownership levels in US airlines currently allow 25 per cent voting stock, plus additional non-voting stock as long as the US' strict regulations concerning the control of US airlines by foreign interests are not breached.