Airlines Declare Open Season on 'Open Skies'

Currently, the only U.S. carriers serving Heathrow are American(AMR Quote) and United(UAUA Quote), so other U.S. airlines can be expected to follow Continental's lead. "I expect all of them to begin competing vigorously to obtain sufficient slots for their anticipated Heathrow operations," says Dan Kasper, managing director of consulting firm LECG.

Of course, it remains to be seen exactly what is meant by increased access to Heathrow. Theoretically, carriers will have the right to obtain Heathrow slots, but neither the cost of the slots nor the level of availability has been defined. Frankfurt International Airport is already open to all -- but try getting slots there for flights this summer.

Global Alliances, European Consolidation

In addition to Heathrow access, the EU-U.S. agreement promises that regulators will show increased receptiveness to global alliances and that U.S. carriers can serve any European city.

For Northwest(NWACQ Quote), the deal could mean full antitrust immunity for its SkyTeam airline alliance.

Since 1993, Northwest and KLM have been allowed to discuss pricing, scheduling and marketing for their trans-Atlantic flights. But In 2004, Air France(symbol Quote) acquired KLM. Air France and Delta(DALRQ Quote) have immunity on trans-Atlantic flights, but the Department of Transportation denied Northwest's request to have its immunity include Air France and Delta.

"Northwest looks forward to working with its partners and applying with the Department of Transportation for expansion of its antitrust immunized alliance," says Andrea Fischer Newman, Northwest's senior vice president of government affairs. "The DOT has said that the new U.S.-EU agreement would satisfy key regulatory concerns to allowing the expanded alliance to proceed."