BRUSSELS, March 20 (Reuters) - An EU deal to reform the

continent's air traffic control only provides a "baby step" fix

for an industry dogged by an increase in flight delays, strikes,

taxes and sustainability pressure, airlines and European

officials said on Wednesday.

The European Commission has been trying to pass the

ambitious "Single European Sky" reform for the past 20 years,

aiming to increase capacity, lower costs and make air travel

more efficient thus helping to reduce fuel consumption and

environmental impact.

A provisional agreement between member states and the EU

Parliament in early March heavily waters down the Commission's

proposal, with a bloc of countries pushing to increase taxes as

an alternative way to meet Europe's green transition goals. Both

legislative bodies still need to give the final sign off on the

new rules.

"We had an ambitious proposal...Member states do not have

the same sense of urgency, it's sad but true but we've only

achieved a baby step and we feel as the Commission that this

cannot be the end of the reform but maybe the situation needs to

get worse before members open their eyes," Rachel Smit, a member

of the transport cabinet at the European Commission, told an

aviation conference.

"We agree that taxing aviation is the not the best way to

go."

Smit added that new technology deployment under joint

public-private partnership, SESAR, would nevertheless help

reduce some inefficiencies.

Easyjet ( EJTTF ) CEO Johan Lundgren called the deal a "missed

opportunity" while the leaders of British airline Jet2 ( DRTGF ) and

Spain's Volotea criticised the decision, saying taxes are only

hurting citizens.

"I find it staggering that national governments are refusing

to sign up to this and in the meantime implementing taxes,

knowingly raising airfares...knowingly pursuing a policy that

makes flying something for the rich and privileged," Jet2's ( DRTGF ) CEO

Stephen Heapy told a panel.

Ireland's minister of state for transport, Jack Chambers,

said the debate had become circular with intransigence by a

"controlled, blinkered lobby".

"The taxes are just being duplicated and triplicated,"

Chambers said.

"The value proposition (of the deal) is minimal and does

very little to deliver environmental reforms."