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The April 2007 Open Skies Agreement between the United States and the European Union has been hailed as a landmark in aviation deregulation. Under the terms of the agreement, any U.S. or EU airline may fly between any city in the United States and Europe—a major departure from the byzantine restrictions that previously characterized transatlantic air travel. Nevertheless, in several key respects, the treaty stops short of full deregulation. This Note assesses the probable impact of the Open Skies Agreement and explores why EU negotiators were willing to compromise on several of their core objectives.