BRUSSELS, May 11 (Reuters) - European Union member states on Thursday gave the green light for the start of talks with the United States to scrap restrictions on EU airlines leasing planes and crew from U.S. carriers.
The leasing of crewed planes from another airline - known as wet leasing - is a common practice in the industry to boost flexibility in meeting demand, and the 10-year-old EU-U.S. Open Skies aviation services agreement envisaged a liberal regime.
But a dispute arose after the EU separately in 2008 imposed a seven-month duration limit, renewable once, on European airlines wet leasing from non-EU carriers, prompting retaliatory action from Washington.
The European Commission will now be able to initiate talks with the United States to remove any time limit on airlines' wet leasing deals.
"The wet lease agreement with the United States will create new business opportunities and improve services on both sides of the Atlantic," said Joe Mizzi, the minister for transport and infrastructure in Malta, which holds the rotating EU presidency.
Following the imposition of the EU time limit, the United States began imposing similar duration limits on EU carriers wet leasing from other EU carriers on their routes to and from the United States, making it hard for European airlines to plan routes as they would not know if the wet leased crews and planes would have permission to fly.
The prospect of an unrestricted wet leasing deal with the United States had worried some countries and pilot associations that airlines could use wet leasing as a way to operate regular services with cheaper crews, or that it could set a precedent for similar deals with other countries.
But the Council of the EU - representing member states - said the new agreement would be specific to the United States and did not imply there would be similar agreements with other non-EU countries.
Low-cost airline Norwegian Air Shuttle has faced criticism for employing crew from Thailand, although it has made an effort recently to employ more Europeans.
Critics of the liberalisation effort had asked for the Commission to ensure national regulators would be able to subject wet leasing deals to a public interest test to protect jobs, much like the United States does. (Reporting by Julia Fioretti; Editing by Mark Potter)