It gets worse ...
As if the prospects for O/S weren't precarious enough, the EU has decided to throw another problem into the mix; it has now proposed to include airlines in carbon emission trading, something which has gone down like a lead balloon in Washington, with talks about threats of legal action over what Washington sees as a tax.
Add this to the stand-off over foreign ownership of US carriers and you have a fine stand-off and certainly one which looks further from resolution than ever. I don't know what deadline has been set by the Commission for the Americans to reply with their proposed rule on ownership (I thought this was expected sometime next month?), but it's probably academic at this stage, because it's likely that Congress will be able to veto any deal done - even if agreement is reached.
Looking at matters from the EU side and although I studied EU Law many years ago, I am a bit rusty on it; I'm trying to look for examples of case law where the EU Commission was ruled to have acted ultra vires as a result of imposing a competitive disadvantage on a particular country/airline; this appears to be the case for Ireland. The EU Commission is refusing to allow Ireland to move ahead to a more balanced, fairer bilateral agreement with the US. The situation for Ireland is even more frustrating because within the next week or so, the European Court is expected to rule on the Commission's case against the Netherlands, which was the first country to enter into an O/S deal with the US; although the Court is expected to rule in favour of the Commission, the actual effect of this is not likely to be great, because although previous O/S agreements entered into by Germany, France, Italy and other countries were ruled illegal, the EU did nothing to compel them to revert to the old bilaterals, but it still refuses to let Ireland move forward with what would be a far tamer agreement - much less competitive than full Open Skies, even with the changes agreed. The result of this is that, now, thanks to the Commission, the competitive gap between Ireland and virtually every other EU member state (except the UK) is greater than ever! Thanks guys.
What I'm also trying to determine is the extent to which the Commission can go in negotiating agreements with third countries, in undermining the interests of member states; in its negotiations with the US, the Commission may well be pursuing a noble and creditable goal, but I'm not convinced that the negotiating power given to it as a result of the Commission -v- Germany case extended to allowing it to place a member state at a competitive disadvantage; in other words, does a long term potential goal justify the imposition of a short-medium (indeed, indefinite) actual competitive disadvantage. I have serious doubts as to whether the Commission has such powers.