The injustice of current trans-Atlantic air regulation has been further underlined, following confirmation that foreign ownership of British Airways and Virgin Atlantic is higher than that of bmi british midland.
60% of bmi’s shares are owned by UK nationals through a UK based investment company, while 40% are owned by other EU shareholders.
In contrast, over 48% of British Airways shares are now owned outside the UK and the EU in foreign hands, forcing the airline to warn non-UK shareholders that it is close to breaching its foreign ownership limits. Virgin Atlantic is 49% owned by Singapore Airlines.
Under the Bermuda II Treaty, British Airways and Virgin Atlantic are the only UK carriers permitted to provide Heathrow-US services. One of the arguments sometimes offered by defenders of this restrictive regulation is that it promotes the UK aviation industry.
However, bmi is more British than either Virgin Atlantic or British Airways.
Sir Michael Bishop, chairman of bmi, said:
“Yet another argument in support of the Bermuda II Treaty has proved to be bogus. The lack of competition at Heathrow has for years produced high fares, which is bad for consumers. Now it is clear that Bermuda II does not do much for British aviation either, as the only two UK-based airlines that are allowed to provide trans-Atlantic services from Heathrow are increasingly in foreign ownership.”
“bmi is the best of British. A significant majority of the shares are in British hands and - unlike British Airways and Virgin Atlantic - ownership of the airline is 100% European.
“The best way for the government to back the consumer and the British aviation industry is to liberalise the Heathrow-US market, which will deliver choice, competition and lower fares.”