Under the agreement, for the first time, European airlines can fly without restrictions from any point in the EU to any point in the US.

"This marks the start of a new era in transatlantic aviation," declared Jacques Barrot, Vice-President of the European Commission in charge of Transport. "This agreement will bring more competition and cheaper flights to the US," he predicted.

The agreement, the most ambitious air services deal ever negotiated, will see the two biggest aviation markets, encompassing 60% of world traffic, cooperate more closely in all fields of aviation policy.

According to Barrot, in May 2008, the European Commission will engage in second-stage negotiations with the US, with a "fully Open Aviation Area between the EU and the US" its objective.

All EU airlines are now able to operate direct flights to the US from anywhere in Europe and not just from their home country. The agreement removes all restrictions on routes, prices, or the number of weekly flights.

Many airlines will increase the number of flights and destinations on Sunday. Flights between London-Heathrow and the US, for example, will increase about 20% compared to April 2007.

With about 50 million annual passengers travelling between the EU and the US, the agreement covers by far the biggest international air transport market. The EC estimated that the benefits for consumers could reach up to EUR12bn (USD18.78bn) over the first five years. It also claimed that the agreement could also lead to the creation of 80,000 jobs on both sides of the Atlantic.

The agreement also establishes closer cooperation between the EU and the US in order to tackle new challenges, such as security or the environment.

The agreement was signed on April 30th, 2007 at the EU-US Transatlantic Summit in Washington. It replaces 21 bilateral agreements between member states and the United States.

While experts anticipate the agreement will effect a radical shake-up of the transatlantic aviation market, Graham Pickett, partner serving the aviation industry at Deloitte UK, believes that some airlines may find it difficult to secure landing slots at certain airports, especially London Heathrow, where previously just four airlines were permitted to operate flights to the US.

"Trading in slots, a bit of a grey area in terms of regulation, can be an extremely expensive business, with prime slots potentially changing hands for up to GBP30 million a pair," he observed.

“Alliances between carriers are seen as the best way to open up routes from Heathrow to the US, with members of the Star Alliance looking to British airline BMI, which has the second highest number of slots at Heathrow, to help them," Pickett added.

The agreement could also prompt an increase in M&A activity, Picket forecasts, especially in the second stage of the Open Skies agreement, when current regulations on European investment in American airlines could soften.