bmi insists the European Commission must bring ‘illegal’ UK / US regulations to an end - British Airways must not be allowed to block liberalisation and hold consumers to ransom


bmi british midland is to ask the European Commission (EC) to immediately investigate the UK government for its continued support for anti-consumer regulation of flights between London Heathrow and the US.

The Bermuda II Treaty grants a “club” of four airlines – British Airways, Virgin Atlantic, American Airlines and United Airlines – exclusive access to Heathrow-US routes, allowing them to decide frequencies and fare prices. All other airlines are prevented from flying Heathrow-US routes.

bmi believes that these regulations are in clear breach of European Union (EU) competition law and is confident that the EC will support bmi’s attempts to introduce more competition.

The bmi action has been precipitated by the government’s decision to abandon aviation talks with the US government. These were due to start on Monday 28 January, but the Department of Transport, Local Government and the Regions pulled out without consultation on Friday 25 January, almost as soon as British Airways and American Airlines announced they were abandoning their alliance.

bmi firmly rejects the view that liberalisation between the UK and US cannot be achieved, simply because British Airways and American Airlines appear to have pulled out of their own deal.

At the moment the government is allowing British Airways to effectively veto any new agreement. British Airways must not be allowed to hold governments, other airlines and – most importantly – consumers to ransom, withholding its support until it has the perfect commercial deal for its shareholders.

British Airways left the public sector for the private sector 15 years ago, but the government seems intent on mollycoddling the airline. While the rest of British industry has to quite rightly operate in their markets without government protection from fair competition, British Airways is being treated like a state-owned airline and being allowed to dictate an aviation policy to the government.

The special rights and privileges granted British Airways – and Virgin Atlantic – under the Bermuda II Treaty are tantamount to state assistance. Failure to deregulate Heathrow–US routes is letting these two airlines generate artificially high revenue at the expense of fair competition, lower fares, consumer choice and the national and local economy around Heathrow.

Sir Michael Bishop, chairman of bmi british midland said:

“The government must not meekly give up on liberalisation just because British Airways and American Airlines have walked away from their alliance. Benefits for the consumer are too important to be overridden by the commercial interests of airlines. There is still an agreement to be reached and we call upon the UK and US governments to make rapid progress as a matter of urgency.

Liberalisation of Heathrow-US routes is overdue. The Bermuda II Treaty is anti-consumer and, we believe, against the law. It is time to put consumers first and stop protecting BA and Virgin Atlantic from the level of competition that the rest of British industry has to contend with every day of the year.”