Bermuda II is a Bilateral Air Transport Agreement between the governments of the United Kingdom and the United States signed on July 23, 1977 as a renegotiation of the original 1946 Bermuda Agreement. A bilateral Air Transport Agreement (also sometimes called a bilateral Air Service Agreement) is an agreement which two nations sign to allow civil aviation between their territories. ... July 23 is the 204th day (205th in leap years) of the year in the Gregorian Calendar, with 161 days remaining. ... For the album by Ash, see 1977 (album). ... 1946 (MCMXLVI) was a common year starting on Tuesday. ... In 1946, on the isle of Bermuda, U.S. and British negotiators reached the Bermuda Agreement, the first bilateral Air Transport Agreement regulating civil air transport. ...

The original 1946 Bermuda agreement took its name from the eponymous island where UK and US transport officials met to negotiate a new, inter-governmental air services agreement between Britain and the United States. That agreement, which was highly restrictive at the insistence of the British negotiators who feared that "giving in" to US demands for a "free-for-all" would lead to the then financially and operationally superior US airlines' total domination of the global air transport industry, was the world's first bilateral air services agreement. It became a blueprint for all subsequent air services agreements. United States may refer to: Places: United States of America SS United States, the fastest ocean liner ever built. ... Modern blueprint of the French galleon La Belle. ...

Bermuda II has been revised several times since its signing, most recently in 1995. Although Bermuda II was much less restrictive than the original Bermuda agreement it replaced, it is widely regarded as a highly restrictive agreement that contrasts with the principle of "Open skies" against the background of continuing liberalisation of the legal framework governing the air transport industry in various parts of the world. 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... The Open Skies system is an integrated web-enabled reservation and inventory system suite that includes Internet, call center, airport departure control functionality and more. ...

Description of the Agreement

• Broadly speaking, only a combined four airlines from the US and UK are allowed to operate flights between London Heathrow and the US. The two British carriers are currently British Airways and Virgin Atlantic. The American carriers are American Airlines and United Airlines. The US has also approved Continental to fly to London Heathrow but the British do not recognize this route authority and, consequently, this service is not in operation. However, the British have not obstructed Continental's codeshare agreement with Virgin Atlantic, which places Continental flight numbers in addition to its own on some Heathrow flights. Air India, El Al, Iran Air and Kuwait Airways were permitted to continue exercising their so-called "fifth freedom" traffic rights from Heathrow to JFK, which they had already enjoyed under the original Bermuda agreement. (Both El Al and Iran Air no longer exercise these rights. The former has decided that it makes better economic sense for it to fly non-stop between Tel Aviv and New York. The latter's US traffic rights were withdrawn in the aftermath of the 1979 Iranian hostage crisis.) Similarly, Air New Zealand was allowed to continue using its fifth freedom rights between London and Los Angeles.
• Bermuda II has continued and expanded the principle of "dual designation", i.e. the right to designate two UK airlines as well as two US carriers as "flag carriers" on the same routes, which already existed on the London-New York and London-Los Angeles routes under the original Bermuda treaty.
• The extensive fifth freedom rights US carriers used to enjoy from the UK to other European countries were restricted to a few routes from London Heathrow to what used to be West Germany, including West Berlin, in the days prior to German reunification. In the early '90s, United Airlines used to fly between Heathrow, Berlin, Hamburg and Munich (United had acquired these traffic rights along with Pan Am's transatlantic traffic rights to/from Heathrow for US$1bn in 1990). A few years earlier, TWA flew between Brussels and London but, unlike United, did not have rights to carry local traffic between the two cities.
• American and British regulatory authorities must approve every airline's capacity and pricing ahead of each operating season.
• Each country can refuse traffic rights to a carrier it is not satisfied with, particularly with regard to ownership and/or control.
• Only a specified number of US "gateway cities" can be served by both UK and US carriers from London Heathrow as well as London Gatwick.
• Only the following US gateway cities may be served non-stop from Heathrow: Baltimore, Boston, Chicago O'Hare, Denver, Detroit, Los Angeles, Miami, New York-JFK, Newark, Philadelphia, Phoenix, San Francisco, Seattle, and Washington-Dulles.
• All non-stop flights between London and Atlanta, London and Dallas/Fort Worth as well as London and Houston must use Gatwick as their UK departure/entry point rather than Heathrow.
• In a 1995 annexe to Bermuda II capacity, fare and route restrictions governing all scheduled air services serving airports other than London Heathrow or London Gatwick were lifted. (This partial liberalisation came about as a UK concession to the US to help BA gain approval for its code-share alliance with US Air. As a result, access restrictions that originally covered all London airports were lifted at Luton and Stansted. This, in turn, has enabled "new generation", all-business class carriers such as Eos, Maxjet and Silverjet to enter the lucrative London-New York business travel market by choosing Stansted and Luton rather than Heathrow or Gatwick as their UK departure/arrival airports). Continental Airlines has also taken advantage of this liberalisation by starting service to a number of important regional UK airports, including Bristol, Birmingham, Manchester, Edinburgh, Glasgow and Belfast International Airport. Continental also introduced direct flights from Stansted to Newark in 2001, but these were withdrawn in the industry downturn after the September 11 terrorist attacks.
• As all available routes between London Heathrow/Gatwick and the US are currently taken, any carrier wishing to start a new route to a US gateway city currently not served from either of London's two main airports must drop another route.

London Heathrow Airport (IATA:LHR, ICAO:EGLL), often referred to simply as Heathrow, is the United Kingdoms busiest and best-connected airport. ... For the 1930s airline of similar name, see British Airways Ltd. ... Virgin Atlantic Airways (usually referred to as Virgin Atlantic) is an airline belonging to Richard Bransons Virgin Group (51%) and Singapore Airlines (49%). It operates long-haul routes between the United Kingdom and North America, the Caribbean, Africa, the Middle East, Asia, and Australia. ... American Airlines (AA) is the largest airline in the world in terms of total passengers-miles transported [1] and fleet size[], and the second-largest airline in the world (behind Air France-KLM) in terms of total operating revenues[]. A wholly owned subsidiary of the AMR Corporation, the airline is... United Airlines, Inc. ... Air India (formerly Air-India, Hindi: ) is the national flag carrier of India with a worldwide network of passenger and cargo services. ... Categories: Airline stubs | Companies of Israel | Transportation in Israel | Airlines of Israel ... List of airlines Iran Air is Irans flag carrier airline. ... Kuwait Airways (Arabic: الخطوط الجوية الكويتية) is Kuwaits national and international airline and is wholly owned by the Kuwaiti Government. ... John F. Kennedy International Airport (IATA: JFK, ICAO: KJFK), originally known as Idlewild Airport, is an international airport located in Jamaica, Queens, in southeastern New York City on the edge of Jamaica Bay. ... Tel-Aviv was founded on empty dunes north of the existing city of Jaffa. ... NY redirects here. ... The Iran hostage crisis was a 444-day period during which the new government of Iran after the Iranian Revolution held hostage 66 diplomats and citizens of the United States. ... Air New Zealand (IATA: NZ, ICAO: ANZ, and Callsign: New Zealand) ASX: AIZ NZX: AIR is a major scheduled passenger airline based in Auckland, New Zealand. ... This article is about the capital of England and the United Kingdom. ... Flag Seal Nickname: City of Angels Location Location within Los Angeles County in the state of California Coordinates , Government State County California Los Angeles County Mayor Antonio Villaraigosa (D) Geographical characteristics Area     City 1,290. ... This article is about the continent. ... Boroughs of West Berlin West Berlin was the name given to the western part of Berlin between 1949 and 1990. ... The Federal Republic of Germany (West Germany) and the German Democratic Republic (East Germany) German reunification (German: ) took place on October 3, 1990, when the areas of the former German Democratic Republic (GDR, in English commonly called East Germany) were incorporated into the Federal Republic of Germany (FRG, in English... Berlin is the capital city and one of the sixteen states of the Federal Republic of Germany. ... Hamburg from above Hamburgs motto: May the posterity endeavour with dignity to conserve the freedom, which the forefathers acquired. ... Munich (German: , pronounced  ) is the capital of the German Federal State of Bavaria (German: ). Munich is Germanys third largest city and one of Europes most prosperous. ... Pan American World Airways (Pan Am) was the United States principal international airline from the 1930s until its collapse in 1991, and was credited with many innovations that shaped the international airline industry. ... The Twa, also known as Batwa, are a pygmy people, of short stature, who were the oldest recorded inhabitants of the Great Lakes region of central Africa. ... Nickname: The Capital Of Europe, Comic City City of a 100 Museums[] Map showing the location of Brussels in Belgium Coordinates: Country Belgium Region Brussels-Capital Region Founded 979 Founded (Region) June 18, 1989  - Mayor (Municipality) Freddy Thielemans Area    - City 162 (Region) km²  (62. ... Gatwick Airport (IATA Airport Code: LGW, ICAO Airport Code: EGKK) is Londons second airport and the second largest airport in the UK after Heathrow. ... Baltimore/Washington International Thurgood Marshall Airport (IATA: BWI, ICAO: KBWI) serves the Baltimore-Washington Metropolitan Area in the United States. ... Logan International Airport with aircraft taking off over harbor Bostons Logan International Airport from the airside lounge of Terminal E, illustrating how the airport is largely surrounded by water. ... ORD redirects here. ... Denver International Airport (IATA: DEN, ICAO: KDEN, FAA LID: DEN), often called DIA, is, by land size, the largest international airport in the United States, and the third largest international airport in the world, after only King Fahd International Airport[1], and Montreal-Mirabel International Airport. ... Old DTW Airport Layout Showing The Edward H. McNamara Terminal Detroits colorful Light Tunnel connecting Concourse A with Concourse B/C in the McNamara Terminal Edward H. McNamara Terminal The McNamara Terminal ExpressTram is used to transport passengers from one end of the terminal to the other Detroit Metropolitan... Runway layout at LAX “LAX” redirects here. ... Miami International Airport (IATA: MIA, ICAO: KMIA), is a major airport located in unincorporated Miami-Dade County, Florida between the cities of Miami, Hialeah, Doral, and Miami Springs, the village of Virginia Gardens, and the unincorporated community of Fountainbleau. ... John F. Kennedy International Airport (IATA: JFK, ICAO: KJFK), originally known as Idlewild Airport, is an international airport located in Jamaica, Queens, in southeastern New York City on the edge of Jamaica Bay. ... Newark Liberty International Airport (IATA: EWR, ICAO: KEWR), formerly known as Newark International Airport, is an international airport within the city limits of both Newark and Elizabeth, New Jersey, United States. ... For the ISO abbreviation, see the Philippines. ... PHX redirects here. ... FAA diagram of SFO “SFO” redirects here. ... Seattle-Tacoma International Airport (IATA: SEA, ICAO: KSEA), also known as Sea-Tac Airport, is located in SeaTac, Washington, United States at the intersections of Washington State Route 518, Washington State Route 99 and Washington State Route 509. ... Washington Dulles International Airport (IATA: IAD, ICAO: KIAD) serves the greater Washington, D.C./metropolitan area. ... This article is about the state capital of Georgia. ... Dallas redirects here. ... Fort Worth is the sixth-largest city in the state of Texas, located about 30 miles west of Dallas on the West Fork Trinity River and forming part of the Dallas/Fort Worth Metroplex. ... Houston redirects here. ... Gatwick Airport (IATA Airport Code: LGW, ICAO Airport Code: EGKK) is Londons second airport and the second largest airport in the UK after Heathrow. ... For the 1930s airline of similar name, see British Airways Ltd. ... The US Airways logo A US Airways 737 at Chicago OHare US Airways is an airline based in Arlington, Virginia. ... Luton is a large town and local government district situated in the south of England, located 51 kilometres (32 miles) north of London. ... This article refers to the Kent parish of Stansted. ... Eos, by Evelyn De Morgan (1850 - 1919), 1895 (Columbia Museum of Art, Columbia, SC): for a Pre-Raphaelite painter, Eos was still the classical pagan equivalent of an angel Eos (dawn) was, in Greek mythology, the Titan goddess of the dawn, who rose from her home at the edge of... MAXjet IATA: MY OACI: MXJ A new airline which is offering an all business class cabin on their airplanes. ... Silverjet is a British airline that flies daily from London Luton Airport to Newark Liberty International Airport, New York. ... Clifton Suspension Bridge Bristol (IPA: ) is a city, unitary authority and ceremonial county in South West England, 115 miles (185 km) west of London and between the cities of Bath, Gloucester and Newport. ... The city from above Centenary Square. ... This article is becoming very long. ... Edinburgh (pronounced ; Scottish Gaelic: ) is the capital of Scotland and its second-largest city. ... For other uses, see Glasgow (disambiguation). ... Belfast International Airport (IATA: BFS, ICAO: EGAA) is an airport located some 21 kilometres (13 miles) northwest of Belfast in Northern Ireland. ... The date that commonly refers to the attacks on United States citizens on September 11, 2001 (see the September 11, 2001 Attacks). ...

Historical background

In July 1976 Edmund Dell, the then Secretary of State for Transport, renounced the original Bermuda air services agreement of 1946 and initiated bilateral negotiations with his US counterparts on a new air services agreement, which resulted in the Bermuda II treaty of 1977.

The reason for this was that there was no provision in the original 1946 Bermuda agreement that would have allowed British Caledonian (BCal), then the UK's foremost wholly privately owned, Independent international scheduled airline, to use the licences the CAA had awarded it in 1972 to begin daily scheduled services from its London Gatwick base to Houston and Atlanta. (These cities were not nominated as "gateway cities" in the original Bermuda agreement.) In addition, there was no provision in the original Bermuda agreement that would have allowed Laker Airways to use the licence the UK's Air Transport Licensing Board (ATLB), the CAA's predecessor, had awarded it in 1971 to commence a daily "Skytrain" operation between London Stansted and New York JFK. This article is becoming very long. ... The Civil Aviation Authority (CAA) is the name for the national body governing civil aviation in a number of countries. ... 1972 (MCMLXXII) was a leap year starting on Saturday. ... Laker Airways was a wholly privately owned, Independent British airline founded by the late Sir Freddie Laker in 1966. ... 1971 (MCMLXXI) was a common year starting on Friday. ... Terminal building, designed by Sir Norman Foster Stansted Airport is a medium-sized passenger airport with a single runway, located in the English county of Essex about thirty miles north of London. ...

Under the new agreement, BCal had its licences to commence scheduled services from its Gatwick base to both Houston and Atlanta confirmed and was designated as the UK's exclusive flag carrier on both routes. It also obtained a licence and sole UK flag carrier status to commence scheduled services from Gatwick to Dallas/Fort Worth. In addition, BCal obtained a licence and sole UK flag carrier status to commence scheduled all cargo flights between Gatwick and Houston - including an optional stop-over at Manchester or Prestwick in either direction. This article is about the state capital of Georgia. ... Dallas redirects here. ... Fort Worth is the sixth-largest city in the state of Texas, located about 30 miles west of Dallas on the West Fork Trinity River and forming part of the Dallas/Fort Worth Metroplex. ... This article is becoming very long. ... Prestwick Prestwick is a town located in South Ayrshire on the central west coast of Scotland, approximately 30 miles to the south-west of Glasgow. ...

The UK Government chose to designate Laker Airways rather than BCal as the second UK flag carrier to New York to enable that airline to inaugurate its long-planned "Skytrain" operation on that route.

Moreover, both sides agreed to continue dual designation, i.e. designating two UK flag carriers as well as two US flag carriers, on the London-New York and London-Los Angeles routes. The principle of dual designation was extended to another two high-volume routes. The UK side chose to designate a second carrier on London-Miami, while the US side chose London-Boston for the same purpose. This meant that a second British airline was permitted to commence scheduled services on the former route while another American carrier could do the same on the latter route. The UK Government chose to designate Laker Airways as the second UK flag carrier on the L.A. and Miami routes while the US Government decided to designate Northwest as the second US flag carrier on London-Boston. (Pan Am and TWA continued in their role as the two designated US flag carriers between London and New York as well as London and L.A. respectively.) This article is about the city in Florida. ... Nickname: City on the Hill, Beantown, The Hub (of the Universe)1, Athens of America, The Cradle of Revolution, Puritan City, Americas Walking City Location in Massachusetts, USA Counties Suffolk County Mayor Thomas M. Menino(D) Area    - City 232. ... This article is about the largest city in California. ... Northwest Airlines is an airline headquartered in Eagan, Minnesota in the United States of America. ...

During the Bermuda II negotiations the UK side succeeded in having a clause stating that Gatwick - rather than Heathrow - was to be nominated as the designated US flag carrier's London gateway airport whenever BCal was going to be the sole designated UK flag carrier on the same route inserted into the new air services agreement. This clause was meant to support the growth of BCal's scheduled operation at Gatwick as well as to redress the competitive imbalance between it and its much bigger, more powerful rivals.

The UK side furthermore succeeded in negotiating a three-year "exclusivity" period for the incumbent operator on any new route with their US counterparts.

For Gatwick-based BCal this meant that it did not have to face any competitor that was using Heathrow, a more accessible airport with a bigger catchment area and a far greater number of passengers connecting between flights, on any of the new routes it was planning to launch to the US. It also meant that it had any new route to the US completely to itself for the first three years of operation, which most airline industry analysts reckon is sufficiently long for a brand-new scheduled air service to become profitable.

At British insistence Bermuda II furthermore contained clauses that made it illegal for any airline operating scheduled flights between the UK and the US to resort to predatory pricing or capacity dumping. Air fares were only approved if they reflected the actual cost of providing these services. Similarly, capacity increases were sanctioned on a reciprocal basis only. The reason for insisting on the inclusion of these provisions in the Bermuda II agreement was to prevent the much bigger, better financed and commercially far more aggressive US carriers from undercutting BCal with "loss-leading" fares cross-subsidised with profits those carriers' vast domestic networks generated as well as to stop them from "marginalising" the UK carrier by adding capacity far in excess of what the market could sustain. Predatory pricing is the practice of a dominant firm selling a product at a loss in order to drive some or all competitors out of the market, or create a barrier to entry into the market for potential new competitors. ...

In 1981, in an annexe to Bermuda II, both sides agreed to automatically nominate Gatwick as the gateway airport for London for any London-US route that did not already exist under the original 1946 Bermuda agreement.

Bermuda II's access restrictions to Heathrow are still in force almost 30 years after the agreement took effect. BA's access rights to Heathrow under Bermuda II derive from the fact that it is BOAC's legal heir on all routes that airline used to operate between Heathrow and various points in the US under the original Bermuda agreement. American's and United's access rights to Heathrow under Bermuda II derive from the fact that they are TWA's and Pan Am's respective legal heirs on all routes these airlines used to operate between various points in the US and Heathrow under the original Bermuda agreement. However, Bermuda II contained terms that US negotiators overlooked. The agreement specifically mentioned Pan Am and TWA. When Pan Am sold Heathrow rights to United Airlines, British negotiators initially stated that they would not allow United to receive the transferred route authority citing the treaty's specific designation of Pan Am and stated that United was not a successor airline in that it was not taking ownership of Pan Am. This may have been a negotiating ploy as the British later did allow transfer of route authority to United. Virgin Atlantic's access rights to Heathrow under Bermuda II derive from the fact that the UK was not using its entitlement to nominate a second carrier to match the two US carriers' presence at London's premier airport. The UK Government therefore took advantage of the abolition of the London Air Traffic Distribution Rules, which had confined Virgin's London operations to Gatwick, as well as of the US Government's intention to have American and United replace TWA and Pan Am as the designated US flag carriers at Heathrow to help Virgin establish a presence at that airport as well. These access restrictions are also the reason BA (as BCal's legal heir between London and Houston, London and Dallas as well as London and Atlanta) and American (as Braniff's legal heir between Dallas and London) are obliged to continue using Gatwick as their UK gateway for all non-stop scheduled operations between London and Houston, London and Dallas as well as London and Atlanta as long as Bermuda II remains in force. The British Overseas Airways Corporation (BOAC) was the exclusive British state airline from 1939 until 1946 and the long-haul British state airline from 1946. ... One of many different airplane livery designs of Braniff International Airlines. ...

Future

Liberalisation of the Bermuda II agreement has been the declared intention of both countries since 1995. However, negotiations have so far been unsuccessful.

Meanwhile, matters have been complicated by the European Court of Justice's judgement to declare all bilateral agreements between individual EU member states and the US illegal. Such agreements are deemed to violate the EU's Common Aviation Market. Official emblem of the European Court of Justice The Court of Justice of the European Communities, usually called the European Court of Justice (ECJ), is the highest court of the European Union (EU). ...

The main sticking point that has until now prevented the conclusion of a new, transatlantic "Common Aviation Area" agreement between the EU and the US is that the UK and most other European countries view the US version of "Open Skies" as too restrictive. The US "Open Skies" template denies foreign airlines "cabotage" rights, i.e. the right to operate wholly within the US domestic market without entering into a code-share agreement with a US carrier. It also denies foreign airlines the right to acquire stakes in their US counterparts with the intention of exercising boardroom control. ãItalic textikkllllllllllllllllllikjidfc bb. ...

Another bone of contention preventing the conclusion of a "Common Aviation Area" agreement between the EU and the US is the US government's continuing insistence on its so-called "Fly America" policy for all employees of the Federal Government. This policy compels US government employees to make all their work-related, overseas air travel arrangements with US-based airlines only. (This also includes a requirement for Federal employees to use international services operated by foreign airlines only if they are code-shared with a US carrier, in which case these services must be booked under the US carrier's flight number.) A federal government is the common government of a federation. ...

There are reports (March 2, 2007) that a tentative agreement has been reached to drop Bermuda II restrictions preventing US flag carriers, other than United and American, from flying to Heathrow. ^[1]