Amid controversy the European Union transport ministers have unanimously backed an ”open skies” aviation deal with the US, aimed at liberalising transatlantic air travel. However, at Britain's request, ministers agreed to delay plans to implement the deal from October this year to March 2008.
Whether any opening up of the transatlantic routes would bring down air fares is unlikely, according to industry observers and in fact might work in favour of both British Airways and Virgin Atlantic who could open US routes out of continental points. Both airlines have many awards for their cabin services and both have strong marketing teams. One winner could be bmi who has the slots and experience to operate to the US from Heathrow, possibly at the expense of the airline”s small Manchester operation.
What is beyond doubt is that the London ” New York route, dominated by US carriers 30 years ago in a 80/20 ratio is now a British domain to the same ratio. This can be put down initially to the King/Marshall aggressive marketing in the early eighties followed by Richard Branson”s forceful introduction of Virgin Atlantic.
Without doubt Heathrow dominates as the European point of entry and that, in the medium term at least, is not likely to change. On any given day there are 32 flights from London to New York, as against 10 from Paris, Frankfurt six and Amsterdam five.
As things stand only British Airways, Virgin Atlantic and American Airlines operate between Heathrow and New York. United Airlines pulled out last year but retained its Chicago services stopping Delta Air Lines from moving from Gatwick. Continental, Northwest and US Airways might well attempt to get into Heathrow but will find slot acquisition very difficult.
The biggest question is: what will the British and continental airlines get in return?
Will points such as Fort Lauderdale, a major airport by any standards, be able to become gateways?
Will Europeans be able to invest into American airlines any more than the 25% presently allowed?
BA chief executive Willie Walsh said the EU had been "na”ve to believe the US will deliver on the next stage of liberalisation without sanctions."
He added: "With the EU having given away their most valuable negotiating asset ” Heathrow ” the UK government must stand by its pledge to withdraw traffic rights if the US does not deliver further liberalisation by 2010."
Virgin Atlantic”s Paul Charles was just as emphatic: ”It doesn't enable full liberalisation; it doesn't open up US markets so that European and British carriers can operate from one city to another.” However, he did say that Virgin could be operating out of Paris to the US within two years.