Go Ahead Liberalize Transatlantic Air Travel, Says Lufthansa

Lufthansa, the German flag-carrier, has dropped its opposition to a controversial deal that would liberalize transatlantic air travel. The move increases pressure on London to back a deal between the European Union and the US in spite of protests from UK airlines.

Wolfgang Mayrhuber, chief executive of Europe's second-largest airline, called the treaty "a step in the right direction" that would benefit customers even though the US had refused to lift limits on foreign control of US carriers.

The German airline's change of heart looks set to gain the support of Berlin, potentially leaving the UK isolated on March 22, when transport ministers vote on the deal negotiated by the European Commission.

The UK transport select committee is expected to discuss the matter at a hearing on March 13, with testimony from airlines serving transatlantic routes.

The treaty is designed to end restrictions on routes between the EU and the US, and would force the UK to open Heathrow Airport to transatlantic carriers other than British Airways and Virgin Atlantic, United Airlines and American Airlines.

London, which is protecting the position of the two UK carriers, has opposed any deal with the US unless Washington lifts restrictions preventing foreign companies owning more than 25 per cent of the voting stock in US airlines. BA, for example, wants to cement a partnership with American.

Lufthansa's partner in the Star alliance, United Airlines, remains the only US carrier that is offering support for the first stage of the open skies deal agreed by negotiators from the US and the European Commission.

US unions have already called for Congress to intervene and block the deal, while influential politicians such as James Oberstar, chairman of the House transportation committee – and a noted critic of earlier drafts of the deal – have yet to issue a public statement.

Mr Mayrhuber emphasized that the US had made some concessions. "For example, we seem to have succeeded in getting Washington to agree to one-stop-security in the medium term."

He reaffirmed his vision of European consolidation, though he added that financial rigor meant Lufthansa was not interested in buying Austrian Airways, SAS or even Alitalia "for the time being".

Lufthansa said operating earnings last year hit €845m ($1.1bn) on revenues of €19.8bn.

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