bmi urges end to illegal pact

17th Oct 2005

bmi has urged EU and US negotiating teams to “seize the historic
opportunity” offered by today’s talks on open skies across the Atlantic.  The
teams have a real opportunity to bring to an immediate end the illegal
agreement that limits the number of airlines that can provide competitive
services from Heathrow to the US.The Bermuda II agreement has been in place since 1977 and allows only the
UK airlines, British Airways and Virgin Atlantic, and two US airlines, to
serve the US from Heathrow. The agreement was judged to be illegal by the
European Court of Justice in November 2003, but no action has been taken to
scrap the restrictive conditions it contains. 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.
  The EU and US will meet in Brussels next week after a gap of 18 months to
try to bring about an open skies agreement between the EU and the US.  Despite
agreements for free and open competition between most EU countries and the US,
access to Heathrow remains the gift of the privileged few.
  Tim Bye, deputy chief executive officer of bmi said, “It’s an absolute
disgrace 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 US 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our most important trading nations, because of this outdated and prehistoric
piece of illegal legislation,” he added.  “Only bmi is able to provide UK
network competition at Heathrow to the US, 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 US must ensure that the Bermuda II agreement is
ripped up and put greater consumer choice at the top of the agenda.  We are
ready, willing and able to provide that choice.”
  “We have written to M. Barrot encouraging swift progress in negotiations
with the US Administration.  Also, we have reminded 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.”
  bmi has also said that it will vehemently oppose attempts to rekindle the
alliance ambitions of British Airways and American Airlines without the
ability of airlines like bmi to compete on a level playing field, helping to
protect consumer interests.



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