After more than four years of often tense negotiations, hopes are high that the new 'open skies' agreement will usher in a new era of transatlantic travel.

European Union Transport Commissioner Jacques Barrot said: 'This agreement will bring more competition and cheaper flights.'

The EU also estimates that the accord could provide a major boost to transatlantic air traffic, with more than 26million extra passengers expected over the next five years.

Meanwhile, the deal is estimated to deliver benefits worth 12billion euros (S$26billion) for consumers and to create 80,000 jobs in the EU and the United States combined.

The pact is supposed to meet those high ambitions by replacing with a single EU-US accord the patchwork of 21 bilateral aviation agreements that previously existed between Washington and individual European nations.

Previously, six EU countries without such bilateral accords could not even have direct flights to the US.

The new agreement's main innovation is that it will allow any EU carrier to fly from anywhere in the bloc to any point in the US, and then on to a third country, and vice versa.

'The US-EU open skies agreement is a win for consumers because more carriers will be able to compete in more markets,' Delta executive vice-president Glen Hauenstein said.

'More competition will bring better service, lower fares, more destinations and more frequencies,' he added.

But Mr Patrick Murphy, a Washington consultant and deputy assistant transportation secretary under former US presidents Bill Clinton and George H.W. Bush, said that current high fuel prices mean passengers hoping to pick up cheap flights any time soon will be disappointed.

'The fuel cost increase will overwhelm the benefits of more competition,' he said. 'If anyone's looking for a price reduction overnight, that's not going to happen.'

The pact will also lift restrictions on which airlines can fly from which airport, having an important impact on lucrative transatlantic routes from London's busy Heathrow airport.

Under Britain's bilateral aviation accord with the US, only British Airways (BA) and Virgin Atlantic of Britain, and US carriers United Airlines and American Airlines, were allowed to fly from Heathrow to the US.

Airlines not in that exclusive club have now seized on the opportunity to fly new routes out of Heathrow.

'Continental has waited a long time to gain access to Heathrow and this is a great day for us, as well as for all transatlantic travellers,' Continental Airlines chief executive Larry Kellner said, announcing new Heathrow routes.

The route between Heathrow and the US is a moneyspinner, with a first-class BA return ticket costing as much as £7,000 (S$19,200).

Heathrow, which lies west of the British capital and handles 68million passengers a year, is the world's third largest airport in terms of total passengers.

While BA is losing its grip on the airport, it is also seeking to take advantage of the pact by launching a new subsidiary named OpenSkies to fly from continental Europe to the US.

AGENCE FRANCE-PRESSE, BLOOMBERG