It would appear this is going nowhere fast-
LUXEMBOURG (Reuters) -- European Union transport ministers have rejected a U.S. offer for a landmark aviation agreement and want further negotiations, said the European Transport Commissioner Loyola de Palacio.
Further talks on an "open skies" pact would focus on gaining more access for EU carriers to the U.S. domestic market.
"We are going to continue negotiations to try and improve the current situation," de Palacio told reporters.
She said the EU would try to win more concessions on the market access issue before an EU-U.S. summit later this month.
U.S. Transportation Secretary Norman Mineta said in a statement he was disappointed by the decision, calling it a missed opportunity to open access to each others' markets.
"We remain committed to opening up transatlantic aviation markets," he said in a statement. "However, given today's unfortunate decision, we must now review how best to achieve the objective."
Talks between the EU, now 25 nations strong, and the United States began after an EU court ruled that U.S. bilateral agreements with individual EU states broke European rules that create a single internal market for the bloc.
The United States has agreed to let EU investors own up to 49 percent voting stock in a U.S. carrier, up from 25 percent. But it balked at allowing European carriers to fly U.S. domestic routes, known as "cabotage."
Under current bilateral agreements with individual EU countries, U.S. airlines have this right in some cases. De Palacio said this created an "imbalance" in the market.
Part of the agreement as it currently stands addresses this problem. For example, EU carriers would be allowed to charter U.S. aircraft or space on U.S. aircraft for domestic flights, provided the flight was ultimately operated by a U.S. carrier.
"This is considered not enough," she said.
Britain crucial
Nonetheless, European Commission officials have said the United States was unlikely to grant domestic flying rights anytime soon.
Ludolf van Hasselt, head of the EU executive's air transport policy unit, said this week that cabotage was a non-starter for U.S. negotiators and waiting for a potential change in administrations would not strengthen the EU's hand.
Britain, crucial to any EU open skies deal because of its large share of the transatlantic market and because U.S. carriers are anxious to gain more access to London's Heathrow airport, has said it would not support an agreement without better access to the U.S. domestic market.
"We are not going to make a deal with the Americans without the United Kingdom on board," Commission spokesman Amador Sanchez Rico said.
De Palacio said ministers from other nations were more supportive.
A UK spokeswoman said Britain did not see a summit later this month as a necessary deadline for an open skies agreement.
De Palacio said she was determined to reach a deal but added: "It's going to be very difficult." She said the current situation, in which 15 EU nations have bilateral agreements that do not comply with European rules, was "not sustainable."
She also said she had the impression that European airlines were getting cold feet about an accord.
European aviation lobbying groups oppose a quick deal that does not free up the U.S. market.
Current proposals would give European carriers the right to fly to U.S. destinations from any EU member state, easing the way for possible EU airline mergers in the future.