A British Victory

Scheduled airline service between the U.S. and Britain came within a whisker of stopping last week. But the planes kept flying because U.S. and British negotiators came up with a new pact governing air traffic between their countries--at 5:10 a.m. Wednesday, London time, ten minutes after the Bermuda Agreement of 1946 had expired. The new agreement, informally called Bermuda II, on balance seems to give the most benefits to British airlines, which get more new routes between the two countries and a chance for a greater share of transatlantic revenues.

Beyond London. The British had been pressing for a year to overhaul the Bermuda Agreement. They felt that the three U.S. carriers covered by it--Pan American, TWA and National--were getting too much of the North Atlantic business. In 1976 U.S. carriers earned revenues of about $375 million on U.S.-to-Britain runs, while the state-owned British Airways got only $274 million. British airline officials also complained that the U.S. lines got a far better deal in carrying passengers from America beyond London to other European capitals and the Far East: $170 million from those routes for American airlines, v. $8.5 million for British carriers.

Bermuda II makes these changes in the arrangements:

Freddie Laker's Laker Airways, which plans to offer $236 round-trip tickets between New York City and London (TIME, June 27), will become the second scheduled British carrier on that run. Either Laker or British Caledonian, another privately owned carrier, will gain a route between Los Angeles and London. In addition, British airliners will be allowed to fly into Houston and Seattle and, after three years, into Atlanta and Dallas-Fort Worth.

In return, U.S. lines got permission to fly to London from Atlanta and Dallas-Fort Worth, plus new rights to carry passengers beyond Hong Kong to Singapore. But they will have to trim back some of their flights beyond London to Europe. British Airways will bypass New York on the run from San Francisco to London; previously, a stop in New York was required.

The U.S. won some other points. The British dropped their demand for a fixed fifty-fifty split of North Atlantic revenues. American negotiators also fended off British attempts to regulate passenger loads and flight frequencies by government decree; the U.S. agreed only to a "consultative" process if, say, the British complain that Pan Am is scheduling too many New York-London flights. The next move is up to the Carter Administration. It must decide which U.S. airlines get the new runs from Atlanta and Dallas-Fort Worth to London.

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