Europe/US 'open skies' talks set to resume in October

US Transportation secretary Norman Mineta intervened last week, calling his European counterpart Jacques Barrot in an attempt to break the stalemate after talks collapsed in June last year, the paper said.

The sides will meet informally in September to decide whether formal talks can start the following month. Supporters of the open skies agreement say there is a realistic prospect of a deal by Christmas, the Times reported.

An agreement may lead to the removal of all restrictions on flights across the Atlantic, and could scrap bars on the foreign ownership of American and European airlines.

One of the first deals to emerge is likely to be between British Airways PLC and Iberia, the Spanish flag carrier. The British group has made no secret of its desire to increase its holding from the existing 9 pct stake should an agreement emerge.