COMMENT: The Battle of the Atlantic
Today the EU and the USA will meet in Brussels after a gap of 18 months to try and resolve that most ancient of bilateral aviation agreements, known as Bermuda II, and dating from 1977. It currently limits access at Heathrow to two British airlines and two from the United States. When the agreement was signed it was even more restricted with just British Airways, TWA and Pan Am as the privileged carriers. The demise of Pan Am and the later take-over of TWA allowed United Airlines and American Airlines access, together with Virgin Atlantic from 1991. Due to historically negotiated deals Air India and Kuwait Airways operate the route too. Gatwick was open house but has not proved attractive, with British Caledonian failing (BA taking over its operations) and Virgin, Continental, Delta, Northwest and US Airlways offering limited services. bmi, now a Heathrow long haul tenant with flights to Mumbai and Riyadh, has argued vociferously for north Atlantic traffic rights out of the world”s busiest international airport. The agreement was judged to be illegal by the European Court of Justice in November 2003. However all sorts of problems need to be resolved including US domestic traffic rights and airline ownership issues within the United States. And cargo too.
But there is still a war to be fought on the north Atlantic now. This week also sees the introduction of the most novel scheduled air service concept from London to New York since the start of Virgin Atlantic and Upper Class 21 years ago. Next Wednesday (19 October ” the date has been moved several times) Eos introduces a proper flat bed business class only Boeing 757 service between Stansted and JFK, New York”s highest profile international gateway, although not necessarily the best. Just under two weeks later, on Tuesday 1 November, Maxjet gets under way, again from Stansted, but this time what is really a very much upgraded premium economy operation with a 767. And in preparation for a similar Washington service Maxjet announced last week the lease of a two further 767s. ABTN also reports in this issue the introduction of an innovative marketing programme ”Global Business Pass”, essentially working with Delta out of Gatwick and also available via UK regional airports through either Air France and Paris or KLM with Amsterdam.
All this activity highlights what is the world”s busiest and most lucrative air route, that between the UK and the USA, worth and astonishing 18m passengers last year. London to New York totalled 4m passengers and, taken as an example, even Heathrow to San Francisco was worth over one million air travellers. The British government”s recent decision to allow fifth freedom flights to and from the UK from countries outside the EU (with a proviso that each application has to be approved) and these two Stansted launches will add to the flow, not dilute. Mainland Europeans from regional points are likely to use cheap budget airlines to connect to the US, the cost still less than what they might pay from home on an equivalent operation.
These new services in fact raise another question for pondering and not for comment. Under HM Customs and Excise they escape the higher rate of duty (”40) that passengers have to pay in business class. Under the rules the tax is based on the lowest fare available on each flight.
All this makes the choice even more difficult for the business traveller. Where to fly from and with whom? How to deal with the multitude of choices that are now available on any given route? If you are in London, and this is true for virtually anywhere, how do you choose between airlines and both departure and arrival airports? Price, timings, quality of service and additional benefits all go together into the mix to make the actual choice far from easy. One poor journey to an airport, problems with check-in/security/lounge/boarding and of course on-board service, can be very persuasive in trying another routing on a future occasion.
On London ” New York the choice has never been greater. On any given weekday there is currently 26 departures from Gatwick or Heathrow to Kennedy or Newark and often four classes to choose from. Plus the two more now from Stansted. And if you are in the City or east of Tower Bridge it might just be easier, cheaper and quicker and start from London City and change at a mainland gateway. No hassle of getting to Heathrow and then finding yourself in Terminal 3 rather than Terminal 4.
Will the expanding airlines from the Middle East now attempt to cream off some of the London business by operating through Birmingham and Manchester to North America? Their fares will be attractive with cabin services equal to the best. A chauffeur collection will probably be offered if you are travelling in a premium cabin. What will be the government”s policy when the applications come in? Where do the British carriers stand? Likewise the US government and airlines. Everyone believes in competition until it affects them. The UK ” US air travel bilateral (or lack of bilateral) is a clear case of restrictive trade
The issue for business travellers and their travel organisers is where to fly from and with whom. It always has been the biggest dilemma but for 2006 the choice will be even greater. The battle of the Atlantic is about to start again.