Europe's top privacy guardian, the European Data Protection Supervisor Peter Hustinx said he expects the US and the European Union (EU) to reach an agreement on how to share information about passengers flying across the Atlantic, but not by the July deadline.
"It's going to be tough but there will be an agreement," he said.
Many obstacles remain in the way of a meeting of minds. US Homeland Security Secretary Michael Chertoff was in Brussels earlier this month, trying to win European policy makers over to the position of the US, which wants to maximise the use of the data for counterterrorism efforts.
Hustinx said he expects that the interim agreement in place at the moment will have to be extended before a long-term agreement can be reached. "If the talks move in the right direction then I can imagine the interim agreement being extended," he said.
Without an agreement, airlines face either being sued by European data protection authorities for handing over the information on their passengers to the US authorities, or losing landing slots in the US and hefty fines if they don't hand over the information.
An earlier agreement that allowed the sharing of the data with American authorities was thrown out by the European Court of Justice. The court allowed an interim agreement, broadly based on the first agreement, until a new one could be agreed.
Hustinx said he was disappointed by the court ruling, which focused on narrow, technical issues. "I would have preferred a view on the substance of the case," he said.
He said one of the main problems with the earlier agreement was the so-called "pull" mechanism that allowed US authorities to pull up information on passengers as they please.
"'Pull' should be replaced by 'push'," Hustinx said.
Chertoff made it clear earlier this month that he wants all US agencies to have access to the data when they want it. He said such access "isn't negotiable".