European and U.S. negotiators have signed the latest version of their open skies agreement. The pact further expands rights for airlines of each region to serve the other and is likely to result in greater cross-ownership among carriers, though that still remains a tough obstacle to overcome.

Under the newest agreement, the rights of EU carriers to fly between any EU city and any U.S. city will be expanded to include flights between the U.S. and non-EU cities. The two regions will also cooperate more closely on environmental issues such as noise and air pollution.

Despite all the progress and pats on the back, the proverbial elephant in the room still remains -- restrictions on airline majority ownership. The issue was contentious enough to have threatened the entire agreement signed in 2007 during these negotiations. EU airlines are restricted to a 25 per cent ownership stake in U.S. carriers while the latter can control 49 per cent of a European airline. The new agreement will ease the ownership restrictions on EU carriers but no one is quite sure when that will happen. A large political hurdle looms as the U.S. Congress and EU regulators must first approve of the changes and this could take a long time.