A landmark US-European Union agreement on liberalizing transatlantic air travel requires the unanimous backing of the 27 member states, according to the EU Council's legal service, an EU diplomat said on Wednesday.
That legal basis gives Britain a potential veto when EU transport ministers deliberate on March 22 on the pact clinched last Friday, which British Airways and Virgin Atlantic have attacked as unfair.
British Transport Secretary Douglas Alexander said on Tuesday more work needed to be done before Europe could approve the breakthrough accord, which would open up lucrative transatlantic routes to much greater competition.
The diplomat said that while the EU decides on transport issues by qualified majority voting, the "open skies" accord was a so-called mixed agreement, involving the competences of both the Union and the member states, "so it requires consensus".
A European Commission spokesman said EU Transport Commissioner Jacques Barrot, who negotiated the deal, considered the issue so important that he would do his utmost to achieve a consensus agreement.
But spokesman Michele Cercone created some confusion by adding at a news briefing: "I recall that transport questions can be voted on the basis of a qualified majority."
He later added that ministers had the possibility to decide by qualified majority to change the legal basis and vote on the agreement by qualified majority.
Diplomats said that would run counter to EU etiquette of not out-voting a member state with a big national interest at stake. It could also prompt a challenge in the EU courts, prolonging legal uncertainty for airlines.
EU officials said Britain would be alone if it tried to block the deal and noted that while British Airways would face more competition at its London Heathrow Airport hub, other British carriers, such as bmi, stood to gain.
Barrot told reporters that BA could be a long-term beneficiary if the United States was forced to end restrictions barring foreign airlines from flying on domestic US routes under a second agreement due in 2008.
If the restrictions, known as cabotage, were lifted a foreign carrier would be able fly domestic routes in the US.
"British Airways is at a crossroads. It's in a privileged position today at Heathrow. It's true the agreement would open up Heathrow. But if cabotage develops, British Airways would be the first to profit from this agreement," he said.
BA's shares fell sharply on Monday on concerns it would lose market share and profit margin on transatlantic flights.
The EU diplomat said the Commission itself had stated when it submitted a proposed "open skies" agreement to transport ministers last April that the legal basis for decision-making was consensus.
"What we have on the table now is the same proposal... only with extra annexes. There are no changes for the legal basis as proposed by the Commission in April 2006," the diplomat said.
An umbrella organization representing mainly small leisure airlines criticized the deal as one-sided, saying it would bring no real benefits for European carriers.
"The outcomes of the negotiations remain highly unbalanced in favor of the United States," the International Air Carrier Association (IACA) said in a statement. Its members include airlines such as Air Berlin and Thomas Cook.
A spokeswoman for the body representing the major EU airlines -- the Association of European Airlines (AEA) -- said it was still studying the agreement but its initial reading was that it shows some progress.
The AEA's members include both British Airways, which stands to lose out through greater competition at London's Heathrow Airport, its main hub, and airlines such as Air France-KLM, which welcomed the deal and stand to gain.
