Bermuda Agreement

Last updated

The Bermuda Agreement (formally Agreement between the government of the United Kingdom and the government of the United States relating to Air Services between their respective Territories), reached in 1946 by American and British negotiators in Bermuda, was an early bilateral air transport agreement regulating civil air transport. It established a precedent for the signing of approximately 3,000 other such agreements between countries. The Agreement was replaced by the Bermuda II Agreement, which was signed in 1977 and effective in 1978.

Contents

Background

Boeing 314 flying boat Boeing 314 Clipper-cropped.jpg
Boeing 314 flying boat

During World War II, transatlantic air service between Britain and America was limited to Boeing 314 flying boat service between Baltimore and Foynes, which Pan American World Airways had begun in July 1939. British Overseas Airways Corporation (BOAC) also flew the route using three Boeing 314s purchased from Pan Am. [1]

The Bermuda Agreement arose in the wake of the Chicago Conference of 1944, where the United States and United Kingdom disagreed about economic control of international air transport. The US and UK had generally agreed on the first two freedoms of the air (overflight and landings for repair/refueling) but the UK and several other countries refused to accept the US position on the third, fourth and fifth freedoms regarding the handling of passenger and cargo traffic. [2] Specifically, the US sought the freedom for its carriers to determine capacity and frequencies on international routes, while the UK sought predetermined routes and an equal division of capacity between the two nations' carriers on those routes. [3] Britain had lost much of its air fleet in the course of World War II and was reluctant to place itself in full competition with the stronger American air fleet. [4]

Prior to the Bermuda Agreement, the United States signed bilateral aviation agreements with several other European countries (Ireland, Norway, Sweden and Denmark), and had signed a multilateral Transport Agreement with several European and Latin American countries, but service to and from the United Kingdom had to be negotiated with the British government on an ad hoc basis. As of late 1945, the UK had limited transatlantic traffic by the US to 14 services per week, 500 seats per week and a minimum fare of $375. [2]

In July 1945, the US government granted Pan Am, Trans World Airlines (TWA) and American Export Airlines (shortly thereafter acquired by American Airlines and renamed American Overseas Airlines) the right to operate transatlantic service. American began its Douglas DC-4 service between New York and Bournemouth that October. [1] Pan Am announced its own DC-4 service in October 1945 at prices less than 50% of the previous flying boat fares, which led the British government to pressure both Pan Am and the US government to back away from what Britain described as a "wholly uneconomic proposition." [5]

The US and UK governments agreed in late 1945 to meet and discuss the terms of a bilateral aviation agreement. Bermuda was chosen to host the meeting due to its location between the two countries and isolation from their respective governments. In a sign of the rapidly advancing technology of the time, the British delegation arrived in January by Boeing 314 flying boats, and departed in February by Lockheed 049 Constellation pressurized landplanes. [5]

Key terms

Unlike the existing bilateral and multilateral aviation agreements, the Bermuda Agreement defined specific routes on which each countries' carriers could fly, with the right to pick up or discharge international traffic (but no cabotage rights) at any point along the routes: [2]

The inclusion of many fifth freedom routes (beyond the United States and British Isles) reflected the fact that many territories such as Hong Kong, Singapore and India were still British colonies at the time the agreement was signed, and that many third countries were eager for air service and willing to provide rights to British and American carriers without restrictions. [4]

As a compromise on the capacity issue, the Bermuda Agreement provided for equitable principles that "there shall be a fair and equal opportunity for the carriers of the two nations to operate on any route between their respective territories (as defined in the Agreement) covered by the Agreement and its Annex" and that "in the operation by the air carriers of either Government of the trunk services described in the Annex to the Agreement, the interest of the air carriers of the other Government shall be taken into consideration so as not to affect unduly the services which the latter provides." [3]

Fares were made subject to regulatory approval by authorities in each country or by the International Air Transport Association, effectively giving the IATA immunity from US antitrust law, which immunity remained in effect on North Atlantic routes until 1979. [4]

Operations under the agreement

1940s

Pan Am Lockheed Constellation at Heathrow Airport, London Pan Am L-049 Constellation at London.jpg
Pan Am Lockheed Constellation at Heathrow Airport, London

Pan Am took delivery of the Lockheed 749 Constellation in June 1947 and began its "round-the-world" route with eastbound stops in New York, Gander, Shannon, London, Istanbul, Dhahran, Karachi, Calcutta, Bangkok, Manila, Shanghai, Tokyo, Guam, Wake, Midway, Honolulu and San Francisco, taking advantage of Bermuda Agreement fifth freedom rights. [6]

Newfoundland, an essential refueling stop on any transatlantic air route in the 1940s, was part of Britain at the time the Bermuda Agreement was signed. In 1949, following its accession as a Canadian province, the United States signed an agreement with Canada to provide for fifth freedom rights to and from Gander. [4]

1950s

BOAC de Havilland Comet jet DH Comet 1 BOAC Heathrow 1953.jpg
BOAC de Havilland Comet jet

Pan Am acquired AOA from American Airlines in 1950, concentrating the US-UK air travel market to three carriers: Pan Am, TWA and BOAC.

BOAC, still Britain's sole transatlantic carrier, sought to compete with Pan Am's "round the world" service by offering an "all-red" route from Britain to Australia via Canada, but bilateral agreements between the UK and these countries stalled in the early 1950s. BOAC proceeded to open a London-Chicago route in May 1954, with the intention to extend the service to San Francisco and Tokyo. The San Francisco extension was not realized until 1957, and US government approval for the Tokyo service did not come until 1959 due to objections by Northwest Airlines. [7]

BOAC introduced de Havilland Comet jet service on the London-New York route in 1958. TWA began jet service on the New York-London-Frankfurt route in 1959.

1960s

The United States began to exercise an even more dominant position in the transatlantic market during the 1960s. One key issue was that Pan Am and TWA began to use the hub and spoke system to feed passengers from many US destinations through a transatlantic "gateway" and on to Europe, giving the US carriers an advantage in serving secondary markets. Partly as a result of this competitive pressure, the market share of BOAC on transatlantic routes fell from 37.8% in 1961–62 to 30.9% by 1966–67. [8]

1970s

The British government added a privately owned carrier, British Caledonian, to the transatlantic market in 1973, with flights from London's Gatwick Airport to New York and Los Angeles. BCal was forced to exit the market in 1976 after the British government determined that competition was not improving Britain's overall market share.

Termination

In 1976, the British government announced its intention to renounce the agreement, beginning the negotiation of the Bermuda II Agreement which became effective in 1978. [8] Although the UK initially sought an equal division of capacity between UK and US carriers, the final Bermuda II agreement largely preserved the liberal capacity provisions of Bermuda I. [4]

The Bermuda agreements were replaced in two stages on 30 March 2008, and 24 June 2010, by the EU–US Open Skies Agreement between the European Union (representing 25 European countries) and the United States, providing for an Open Skies regime even more liberal than Bermuda I.

Effect on other aviation agreements

Both the United States and the United Kingdom made the Bermuda Agreement their model for bilateral agreements with other countries until Bermuda II. The only major exception during this era was the 1966 agreement between the United States and the Soviet Union, which designated Pan Am and Aeroflot as the operating carriers from each country and left commercial details of service to the airlines' prior agreement. Although most other agreements during this era followed the Bermuda I model, they tended to include fewer and fewer fifth and sixth freedom rights (traffic rights to and from third countries) as time went on, as the increased range of aircraft made such rights less necessary. [4] The general principles of the Bermuda Agreement were also followed by other countries, such as Canada in its various bilateral agreements. [3]

Related Research Articles

Airline Company that provides air transport services for travelling passengers and freight

An airline is a company that provides air transport services for traveling passengers and freight. Airlines use aircraft to supply these services and may form partnerships or alliances with other airlines for codeshare agreements, in which they both offer and operate the same flight. Generally, airline companies are recognized with an air operating certificate or license issued by a governmental aviation body. Airlines may be scheduled or charter operators.

<span class="mw-page-title-main">Pan Am</span> Primary international airline of the United States from 1927 to 1991

Pan American World Airways, originally founded as Pan American Airways and commonly known as Pan Am, was the principal and largest international air carrier and unofficial overseas flag carrier of the United States for much of the 20th century. It was the first airline to fly worldwide and pioneered numerous innovations of the modern airline industry, such as jet aircraft, jumbo jets, and computerized reservation systems. Until its dissolution in 1991, Pan Am "epitomized the luxury and glamour of intercontinental travel", and it remains a cultural icon of the 20th century, identified by its blue globe logo, the use of the word "Clipper" in its aircraft names and call signs, and the white uniform caps of its pilots.

<span class="mw-page-title-main">Shannon Airport</span> International airport in County Clare, Ireland

Shannon Airport is an international airport located in County Clare in the Republic of Ireland. It is adjacent to the Shannon Estuary and lies halfway between Ennis and Limerick. The airport is the third busiest airport in the Republic of Ireland, and the fifth busiest on the island.

Freddie Laker English businessman

Sir Frederick Alfred Laker was an English airline entrepreneur, best known for founding Laker Airways in 1966, which went bankrupt in 1982. Known as Freddie Laker, he was one of the first airline owners to adopt the "low cost / no-frills" airline business model that has since proven to be very successful worldwide with companies such as Norwegian Air, Ryanair, easyJet, AirAsia and WestJet.

British Caledonian (BCal) was a British private independent airline which operated out of Gatwick Airport in south-east England during the 1970s and 1980s. It was created as an alternative to the British government-controlled corporation airlines and was described as the "Second Force" in the 1969 Edwards report. It was formed by the UK's second-largest, independent charter airline Caledonian Airways taking over British United Airways (BUA), then the largest British independent airline and the United Kingdom's leading independent scheduled carrier. The carrier slogan was Let's go British Caledonian in the 1970s and We never forget you have a choice in the 1980s. The BUA takeover enabled Caledonian to realise its long-held ambition to transform itself into a scheduled airline. The merged entity eventually became the UK's foremost independent, international scheduled airline.

Ghana Airways Defunct national airline of Ghana, 1958–2004

Ghana Airways Limited was the flag carrier of Ghana, with its main base of operation and hub at Kotoka International Airport in Accra. The airline ceased operations in 2004, although plans were discussed to revive it in 2020 in partnership with Egyptair.

The freedoms of the air are a set of commercial aviation rights granting a country's airlines the privilege to enter and land in another country's airspace. They were formulated as a result of disagreements over the extent of aviation liberalisation in the Convention on International Civil Aviation of 1944, known as the Chicago Convention. The United States had called for a standardized set of separate air rights to be negotiated between states, but most other countries were concerned that the size of the U.S. airlines would dominate air travel if there were not strict rules. The freedoms of the air are the fundamental building blocks of the international commercial aviation route network. The use of the terms "freedom" and "right" confers entitlement to operate international air services only within the scope of the multilateral and bilateral treaties that allow them.

Caledonian Airways Scottish private charter airline from 1961 until a merger in 1970

Caledonian Airways was a wholly private, independent Scottish charter airline formed in April 1961. It began with a single 104-seat Douglas DC-7C leased from Sabena. Caledonian grew rapidly over the coming years to become the leading transatlantic "affinity group" charter operator by the end of the decade. During that period, passenger numbers grew from just 8,000 in 1961 to 800,000 in 1970. The latter represented 22.7% of all British non-scheduled passengers. It also became Britain's most consistently profitable and financially most secure independent airline of its era, never failing to make a profit in all its ten years of existence. By the end of 1970, Caledonian operated an all-jet fleet consisting of eleven aircraft and provided employment for over 1,000 workers. At that time, its principal activities included group charters between North America, Europe and the Far East using Boeing 707s, and general charter and inclusive tour (IT) activities in Europe utilising One-Elevens. This was also the time Caledonian merged with British United Airways (BUA), the largest contemporary independent airline and leading private sector scheduled carrier in the United Kingdom, and formed British Caledonian.

A transatlantic flight is the flight of an aircraft across the Atlantic Ocean from Europe, Africa, South Asia, or the Middle East to North America, Central America, or South America, or vice versa. Such flights have been made by fixed-wing aircraft, airships, balloons and other aircraft.

<span class="mw-page-title-main">Laker Airways</span> Defunct private British airline

Laker Airways was a private British airline founded by Sir Freddie Laker in 1966. It was originally a charter airline flying passengers and cargo worldwide. Its head office was located at Gatwick Airport in Crawley, England.

Cabotage is the transport of goods or passengers between two places in the same country. It originally applied to shipping along coastal routes, port to port, but now applies to aviation, railways, and road transport as well.

Bermuda II was a bilateral air transport agreement between the governments of the United Kingdom and the United States signed on 23 July 1977 as a renegotiation of the original 1946 Bermuda air services agreement. A new open skies agreement was signed by the United States and the European Union (EU) on 30 April 2007 and came into effect on 30 March 2008, thus replacing Bermuda II.

Air transport agreement

An air transport agreement is a bilateral agreement to allow international commercial air transport services between signatories.

<span class="mw-page-title-main">American Overseas Airlines</span>

American Overseas Airlines (AOA) was an airline that operated between the United States and Europe between 1945 and 1950. It was headquartered in Midtown Manhattan, New York City.

The EU–US Open Skies Agreement is an open skies air transport agreement between the European Union (EU) and the United States (US). The agreement allows any airline of the European Union and any airline of the United States to fly between any point in the European Union and any point in the United States. Both EU and US airlines are allowed to fly on to a further destination in another country after their initial stop. Because the EU is not treated as a single territory for the purposes of the agreement, this means in practice that US airlines can fly between two points in the EU as long as that flight is the continuation of a flight that started in the US. Airlines of the EU are also allowed to fly between the US and non-EU countries that are part of the European Common Aviation Area, like Switzerland. EU and US airlines can operate all-cargo flights under Seventh Freedom rights, meaning US airlines' all-cargo flights can be operated from one EU country to any other country and EU airlines' all-cargo flights can operate between the US and any other country. Norway and Iceland acceded to the Agreement from 2011 and their airlines enjoy the same rights as EU airlines.

A legacy carrier, in the United States, is an airline that had established interstate routes before the beginning of the route liberalization permitted by the Airline Deregulation Act of 1978 and so was directly affected by that Act. Legacy carriers are distinct from low-cost carriers, which, in the United States, are generally new airlines and were started to compete in the newly deregulated industry.

British Eagle

British Eagle International Airlines was a major British independent airline that operated from 1948 until it went into liquidation in 1968. It operated scheduled and charter services on a domestic, international and transatlantic basis over the years.

British Caledonian (BCal) came into being in November 1970 when the Scottish charter airline Caledonian Airways, at the time Britain's second-largest, wholly privately owned, independent airline, took over British United Airways (BUA), then the largest British independent airline as well as the United Kingdom's leading independent scheduled carrier.

There are bilateral treaties that govern aviation rights between the United States and China, which cover both passenger services and cargo services. The United States has liberal aviation agreements with many countries but not China, Japan, South Africa, and some South American countries. However, there is no "open skies" agreement between China and the US, which generally refers to an agreement that allows unrestricted flights between countries. The current US-China treaty specifies the number of flights permitted. Due to the highly regulated nature of awards for route authority between the two countries and the strict limits on number of flights, the application process is competitive. US airlines have sought to gain support from local politicians and the general public to influence the US government into awarding routes.

History of Scandinavian Airlines System (1933–1952)

The history of Scandinavian Airlines System (SAS) from 1933 to 1951 covers the first attempts at transatlantic travel, the establishment of a consortium and finally the establishment of the consolidated SAS. Aerotransport, the national airline of Sweden, and Det Norske Luftfartselskap (DNL), the national airline of Norway, both started planning transatlantic routes in the mid-1930s. By 1939, negotiations were started with Det Danske Luftfartselskab (DDL) of Denmark, and by 1940 services were to begin. Because of the German occupation of Denmark and Norway, the plans collapsed. In Sweden, Svensk Interkontinental Lufttrafik (SILA) was founded to start private transatlantic flights, which commenced in 1945. Negotiations were started again, and in 1946 the consortium Overseas Scandinavian Airlines System (OSAS) was established to start routes to New York and South America.

References

  1. 1 2 "The Beginnings of Commercial Transatlantic Services". US Centennial of Flight Commission. Retrieved 8 May 2015.
  2. 1 2 3 Cooper, John C. (October 1946). "The Bermuda Plan: World Pattern for Air Transport". Foreign Affairs. Retrieved 8 May 2015.
  3. 1 2 3 Azzie, Ralph. "Specific Problems Solved by the Negotiation of Bilateral Air Agreements" (PDF). McGill Law Journal. 13 (2): 303–308.
  4. 1 2 3 4 5 6 Haanappel, PPC (1980). "Bilateral Air Transport Agreements – 1913–1980". Maryland Journal of International Law. 5 (2): 241–267. Retrieved 8 May 2015.
  5. 1 2 Masefield, Peter (1990). "Bermuda 1". Putnam Aeronautical Review. 2 (6). ISBN   9781557506764.
  6. ↑ "The Pan Am Series – Part XXI: The Constellation". California Aviation Alliance. Archived from the original on 18 May 2015. Retrieved 8 May 2015.
  7. ↑ Higham, Robin (2013). Speedbird: The Complete History of BOAC. I.B.Tauris. pp. 179–182. ISBN   978-1-78076-462-7.
  8. 1 2 "Select Committee on Environment, Transport and Regional Affairs Eighteenth Report: AIR SERVICE AGREEMENTS BETWEEN THE UNITED KINGDOM AND THE UNITED STATES". House of Commons. Retrieved 8 May 2015.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.