Airlines Declare Open Season on 'Open Skies'

The agreement also contemplates that the U.S. will loosen restrictions that limit foreign ownership of its airlines to no more than 25% of the voting shares, even though the Bush administration failed to win support for such a change earlier this year. The agreement notes that some rights could be suspended in 2010 if more concessions do not occur.

Various additional impacts are likely. The agreement could spur European consolidation, said Cathay Financial analyst Susan Donofrio, in a recent report. There has been speculation, for instance, that British Airways may bid for the Spanish carrier Iberia. Donofrio said such bids may occur because "maintaining strict national borders will no longer be necessary to maintain bilateral route rights with the US."

Donofrio also suggested that Great Britain signed on to the agreement only after the DOT's tentative approval Tuesday of Virgin Atlantic's application to fly in the U.S. That approval "helps bring the U.K. to the table," she wrote.

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