EU Ministers Approve Open Skies Deal With Canada

The European Union is set to sign an 'open skies' agreement with Canada, under which Canadian and European Union airlines would be able to fly freely between any EU airport and any Canadian airport.

"EU transport ministers supported the presidency compromise on the EU-Canada aviation agreement," a source in the EU's Czech presidency said on Monday.

An official signing was expected May 6 at the EU-Canada Summit in Prague. It follows a similar deal between the EU and the United States last March.

An existing patchwork of bilateral agreements between Canada and European states, which include restrictions on routes, prices and the number of weekly flights, will be replaced.

The agreement would also ease restrictions on control and ownership of airlines.

Canada already plans to raise the foreign ownership limit to 49 percent of an airline's voting stock from 25 percent -- a move welcomed by the country's main carriers, Air Canada and WestJet Airlines, which want more inward investment.

In a later phase of the deal, investors would be able to set up and control airlines in each other's markets, and in a final stage, airlines would be able to fly freely within each others' markets and onwards from there to other regions.

A European Commission study suggested the agreement would generate an additional 500,000 passengers in its first year, plus over 1,000 jobs and economic benefits of at least EUR72 million euros (USD$95 million).