US and EU negotiators reached an outline agreement on liberalising air services between America and Europe after five days of talks in Washington.
After unexpectedly rapid progress, the two sides said the tentatively agreed deal would allow free access to airports on either side of the Atlantic by both US and European carriers.
Mr John Byerly, US Deputy Assistant Secretary of State for Transportation Affairs, said: "As soon as the agreement applies, every US airline would be legally authorised to fly from any point in the United States to Heathrow and to any airport in Europe.
"By the same measure, every European carrier could fly from Heathrow or any other European airport to any airport in the US.
"They would have to obtain slots and facilities to do so but the legal prohibitions that exist today would no longer exist."
A statement by the two sides said the deal would allow carriers to operate without restrictions on the number of flights, the aircraft used or the routes chosen, including the right to fly beyond the EU or US to other countries.
There would also be no restrictions on fares or co-operative agreements between airlines, including codesharing and leasing.
The deal is subject to approval by the EC council of transport ministers which is due to meet on December 6.
Daniel Calleja, the EC director air transport, said the ministers would also take into account any changes in rules on foreign ownership of US carriers which the US Department of Transportation is now considering.
If approved the agreement could possibly come into force by October 2006.
Once the deal was operating, fresh talks between the EU and US would begin within 60 days to reach a second stage agreement.
Mr Norman Mineta, the US transportation secretary, welcomed the agreement describing it as an "historic opportunity to increase travel, reduce fares, expand commerce and bring two continents closer together."
The UK's bmi also welcomed the outcome of the talks. Its ceo Nigel Turner while wanting to study the details said he had "no doubt that it is a positive and far-reaching step."
* See BTE Analysis