British Airways today (June 5, 2003) welcomed the decision by the Transport Council to grant the European Commission a mandate to negotiate a new air treaty to replace existing bilaterals between the European Union member states and the United States.

Rod Eddington, British Airways’ chief executive said: “The aviation industry is over protected and over regulated. This is an historic decision that paves the way for a truly liberalised European air transport industry and the creation of a common aviation area covering Europe and the US.
“It creates the opportunity to sweep aside the archaic economic and regulatory framework which has held our industry back. If we can be released from the shackles of national sovereignty and historic ownership rules, we can look forward to the same freedoms as other business sectors such as cross border mergers, acquisitions and joint ventures.

“This will lead to greater competition and innovative air services which will benefit the consumer and the industry. In the 1980’s the United States deregulated its domestic market. In the 1990’s Europe liberalised its single market. Both created tremendous growth in air travel and choice for the flying public. If we can now bring these two markets together we will be able to truly modernise our industry and create a vibrant, competitive market.”

The Council and Commission also agreed a way forward for amending bilateral agreements between EU member states and third countries other than the United States.

Mr Eddington added: “This will help remove the uncertainty that has existed over the status of our current bilateral entitlements since the ruling by the European Court of Justice last year.”

The European Court of Justice ruled last year that eight European member states had broken EU law by striking their own agreements with the United States over landing rights for their airlines on transatlantic routes.

Chicago Convention of 1944: After WWII, several nations met to agree the regulatory framework for international aviation. They could not agree on a US proposal, backed by several other countries, that would have created a liberal, multilateral environment for international air transportation. Instead, what emerged by default was the concept of each country negotiating bilateral agreements with its aviation trading partners.

Bermuda I - A joint US - UK agreement signed in 1946, which placed restrictions on air services between the countries, and their cities. It also specified the airlines that would fly the various routes and set pricing regulations and licensing standards for the carriers.

Bermuda II - A revised US-UK bilateral agreement, signed in 1977. The Treaty included the condition that allowed only two British carriers - currently British Airways and Virgin - and two American - United and American - to fly non-stop transatlantic routes from and to Heathrow.

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