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Air Services (United Kingdom-United States Agreement)

Volume 934: debated on Monday 27 June 1977

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asked the Secretary of State for Trade when he expects to conclude the renegotiation of the Bermuda Agreement; and if he will make a statement.


asked the Secretary of State for Trade if he will make a statement on the renegotiation of the Bermuda Agreement on civil aviation.

asked the Secretary of State for Trade if he will make a further statement on the renegotiation of the Bermuda Convention.

asked the Secretary of State for Trade what advantages have been gained for British civil airlines in the renegotiation of the Bermuda Agreement with the United States of America.

I made a statement to the House on 23rd June on the conclusion of the negotiations.

Is not the return to dual designation a remarkably rapid reversal of Government policy since single designation was the basis for the recent distribution of routes between British Airways and British Caledonian? What efforts have been made to ensure that the balance of advantage to the airlines has not been undermined by the new agreement?

The hon. Gentleman has, no doubt, taken part in many negotiations during his life and he will, therefore, know that in the course of negotiations certain points are given up and others are obtained. On the question of dual designation and single designation, we got substantially what we expected to obtain. As for the balance of advantage to particular airlines, we can make our own judgment, but this is something which will emerge only over a period of time. May I say how delighted I am that British Caledonian, as a result of this agreement, is now able to start its solo service to Houston in October? That is a major benefit for it, as are the provisions in respect of single designation for passenger control which will assist it to maintain its competitiveness on that route and to achieve it at Atlanta when it starts there, as I hope, in three years' time.

Is the Secretary of State able to confirm that British Caledonian will retain its existing licence to fly to Los Angeles and that it will be the second British carrier flying from that city? With regard to Houston, in the light of what has happened does he agree that British Caledonian's existing licence to Atlanta and Houston might reasonably be expected to include Dallas-Fort Worth?

The question of Dallas-Fort Worth was covered in policy guidance and is a matter for the Civil Aviation Authority in the first case. We have not decided that Los Angeles should be the second point to which we operate a dual designation. That is a matter which we must retain as an option for the time being.

Does the Secretary of State recollect that, on the subject of the Los Angeles route, he said last Thursday that the reason why the Americans would have two carriers whereas we would have only one was that the British share of the traffic was so small? Does he not think that it would be a good idea to try to double the designation for the British operators to put us on the same footing as the Americans and increase our share of the traffic?

If the hon. Gentleman checks what I said about Los Angeles last Thursday, he will find that it was that in our view Los Angeles at the moment did not deserve dual designation. However, that was an American requirement which, in the course of negotiations, we conceded. That must mean that it will remain open for us to exercise our option in the British interest as to where our second dual designation should operate.

Can the right hon. Gentleman confirm that the signatories to the agreement on the American side are fully competent to ensure its implementation in every State of the Union?

The hon. Gentleman put that question to me the other day, I think. The competence of the American Federal Government must be a matter for the federal system. I am satisfied that within this agreement, on the matters on which the Federal Government are competent, we have achieved substantially what we were out to achieve.