Bmi demands end to transatlantic air restrictions

EU and US negotiators have been urged to develop open skies across the Altantic and allow more airlines to compete.

The call from bmi came as the two sides prepare to meet in Brussels to try and thrash out a new agreement to replace 28-year-old rules that limit only two US and two UK airlines from serving the US from Heathrow – currently British Airways, Virgin Atlantic, American Airlines and United.

Bmi also pledged to “vehemently oppose” attempts to rekindle the alliance ambitions of BA and AA without the ability of other airlines to compete on a level playing field.

As Heathrow’s second biggest airline, bmi has long been lobbying for access to lucrative North Atlantic routes but has been barred from doing so by the 1977 Bermuda II pact which restricts the number of carriers serving the US from the London hub.

Bmi says the agreement was judged to be illegal by the European Court of Justice two year ago but no action has been taken to scrap its restrictive conditions.

“To do so would bring about much needed competition and enable bmi to provide point to point and network connecting competition from the airline’s main operating base at Heathrow,” a statement said. 

The airline’s deputy CEO Tim Bye said: “It’s an absolute disgrace that bmi is denied the opportunity to compete because of an agreement that has been declared illegal, and yet still nothing has been done to consign it to the scrapheap. 

“The Bermuda II agreement has protected airlines operating to the USA from Heathrow from the reality of genuine competition for far too long.

“Heathrow is our main operating base where we are the second biggest carrier by a long way. Yet we cannot develop services on our expanding long haul network to one of our most important trading partners, because of this outdated and prehistoric piece of illegal legislation.

“Only bmi is able to provide UK network competition at Heathrow to the USA yet this continues to be stifled because it does not suit the two UK airlines that benefit from the protection it gives them. The EU and the USA must ensure that the Bermuda II agreement is ripped up and put greater consumer choice at the top of the agenda.

“We have written to the European Commission’s chief negotiator encouraging swift progress in negotiations with the US Administration. Also, we have reminded [transport secretary] Mr Darling that we expect the UK to terminate the illegal Bermuda II agreement forthwith. 

“We plan to see members of the US Administration later this month to add bmi’s support for a truly historic agreement, liberalising air services between the world’s two greatest trading blocs.”

Meanwhile, Virgin chairman Sir Richard Branson warned that there was still a “very real prospect” of the US securing a deal “giving it all it wants with Europe getting little in return.”

He said: “For example, the US government is asking for the right for American airlines to fly into Heathrow and within Europe yet it would continue to refuse to allow European airlines to fly within the US.

“Virgin Atlantic believes in more competition but the only deal worth negotiating is a true Open Aviation Agreement which removes all the regulations which distort our industry. This would be a balanced deal giving both sides everything they want and leaving the consumer the winner, with more services and cheaper fares within a combined US and EU aviation area.

“We don’t know what each side is planning to table next week but what we don’t want is an unbalanced deal giving the US all it wants with little more than empty promises in return.

“In simple terms, the EU must not trade access at Heathrow – its most valuable asset – for anything less than a true Open Aviation Agreement.

“Each side has a number of cards in its hand but the EU holds the Ace and it should only play it to end the game.”

Report by Phil Davies