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CAA: Airport News, "US/UK Air routes conflict set to deepen"
Wednesday, February 16, 2000
Air routes conflict set to deepen
US OPEN SKIES HEARINGS POLITICIANS CALL FOR TOUGH ACTION AGAINST UK TO WIN
GREATER COMPETIT
The London Financial Times Limited
Financial Times, London - The conflict between the UK and the US over
liberalising transatlantic air routes is set to deepen today with the
opening of a controversial hearing in the US House of Representatives.
Witnesses expected to give evidence to the House committee on transportation
and infrastructure hearing include Rodney Slater, US transportation
secretary, and Sir Michael Bishop, chairman of British Midland, the UK
carrier, which is trying to break into the north Atlantic market.
Air transport between the US and the UK is governed by a highly restrictive
bilateral agreement, known as Bermuda II, which governs destinations,
frequencies and fares, and allows only four carriers - British Airways and
Virgin Atlantic from the UK and American Airlines and United Airlines from
the US - to fly between Heathrow and the US.
Talks on a so-called "mini-deal" to open the way for British Midland to
begin services to the US from Heathrow as well as allowing the entry of two
more US carriers, broke down 2 1/2 weeks ago amid considerable acrimony.
The US State Department accused the UK government of being "paralysed" by
protectionist demands made by British Airways, the leading UK carrier, which
is highly dependent on its lucrative north Atlantic routes and its dominant
position at Heathrow, the world's busiest international airport.
Sir Michael last night attacked the UK government for its support for BA,
which he said was against the interests of consumers, in particular UK
business travellers, who were paying a high price for the lack of
competition.
According to British Midland research, a German business traveller pays
Pounds 1,902 (Dollars 3,033) less to fly from Frankfurt to New York in
business class than a British counterpart does from Heathrow.
Sir Michael said that while the UK government was preventing British
Midland, a UK carrier, from entering the transatlantic market, it had
recently granted rights to Air India to fly passengers from the UK to the US
in a bilateral deal with the Indian government in order to gain benefits for
BA.
He claimed that the UK government had been persuaded by BA arguments of the
job losses that would result from Heathrow being opened to more
transatlantic carriers, yet British Midland had promised to create around
4,000 jobs from its planned expansion.
Bud Shuster, the Republican chairman of the House committee on
transportation and infrastructure has called on the US government to take
tough action against the UK in order to force greater competition on
transatlantic routes.
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