Bermuda II 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 the same year to commence a daily "Skytrain" operation between London Stansted and New York.
Under the original 1977 version of Bermuda II, British Airways, Pan Am and Trans World Airlines were the only carriers allowed to operate flights between London Heathrow and the United States.
Paul, held dormant authorities to use Heathrow as their London terminal, grandfathered from use during the original Bermuda Agreement; but could only be operated non-stop by a British carrier.
Other airports in the United States had to be served from Gatwick rather than Heathrow: these eventually included Atlanta, Charlotte, Cincinnati, Cleveland, Dallas/Fort Worth, Houston–Intercontinental, Las Vegas, Nashville, New Orleans, Orlando, Pittsburgh, Raleigh/Durham, St. Louis, and Tampa.
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.
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.
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.
Failure of both nations' governments to agree to such changes prevented the introduction of additional non-stop flights, including between London and Honolulu, Portland (OR), and Salt Lake City.
British Airways did successfully gain approval in 1982 to operate nonstop to New Orleans from Gatwick, as an intermediate stop on its Lockheed L-1011 TriStar service to Mexico City.
This gateway was later omitted as the performance capability of newer Boeing 747s allowed the airline to operate the round trip route nonstop, despite the Mexican city's high altitude.
This, in turn, enabled the now defunct "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 also took advantage of this liberalisation by starting service to a number of important regional UK airports, including Bristol, Birmingham, Manchester, Edinburgh, Glasgow and Belfast.
Subsequently, matters were complicated by the European Court of Justice's judgment to declare all bilateral agreements between individual EU member states and the US illegal.
The main sticking point that had prevented the conclusion of a new, transatlantic Common Aviation Area agreement between the EU and the US was that the UK and most other European countries viewed the US version of open skies as too restrictive.
On 2 March 2007 a draft agreement[7] was reached by negotiators from the European Commission and the US that proposed to drop Bermuda II's restrictions preventing US flag carriers, other than American and United, from flying to Heathrow.
