Britain is set to seal an "open skies" agreement with America this summer that will keep planes flying between both countries after Brexit, a major British newspaper said Sunday.
The Sunday Telegraph newspaper quoted four sources in London and Washington briefed on the talks as saying that a deal is "close" after consensus was reached on the biggest issues up for debate.
"UK and U.S. negotiators have agreed that major transatlantic airlines must be covered despite them being foreign owned -- a break with the normal rules," the major British newspaper said.
"That means flights from Virgin, Norwegian Air and British Airways owner IAG -- all majority-owned outside of the UK and U.S. -- will continue after Brexit," it added.
Britain has also offered in principle to include its overseas territories in the agreement, something not covered by the current EU-U.S. open skies agreement.
The EU-U.S. open skies agreement was brought in 10 years ago to provide uniform rules for airlines and airports, and it has led to an estimated 18 percent increase in transatlantic traffic from 2006 to 2016.
It allows any airline of the European Union and any airline of the United States to fly between any point in the European Union and any point in the United States.
The agreement also effectively allows the free market to set the price and number of flights to and from countries, rather than the governments of these nations.
But the hitch arose when U.S. negotiators offered only a basic bilateral agreement for when Britain quits the EU.
Standard agreements usually require airlines to be majority owned and controlled by firms from their home country.
But both British Airways and Virgin Atlantic don't fall into that category, prompting fears flights could be affected.
Normally landing rights for bilateral deals will only apply to a fixed number of flights per week to a fixed destination.
A fresh round of talks is expected to take place next month with officials and well-placed industry sources increasingly confident an agreement is within reach.
"We could get a deal right now if we wanted," said one UK cabinet source, adding that Britain was mainly holding on for extra concessions.
An agreement, which negotiators believe can be announced before the March 2019 Brexit date even if not implemented, would be major victory for the British government.
Britain will leave the EU-U.S. open skies deal the day after Brexit, meaning flights between America and the UK would be grounded unless an agreement is reached.
Separately, Britain also needs to negotiate an "open skies" deal with the EU, which is critical for U.S. airlines as half of all Americans who fly to the UK travel on to the continent.
Talks with Brussels have yet to progress on such a deal given the impasse on wider Brexit issues such as customs arrangements and what happens on the Irish border.
"Nothing has been finalized," said a U.S. State Department official.