Stalled U.S.-U.K. Bilateral Sparks Rancor

<B>Stalled U.S.-U.K. Bilateral Sparks Rancor</B>

By Barbara Cook

The House aviation subcommittee on Feb. 15 heard testimony about the logjam in negotiations between the United States and the United Kingdom that are aimed at reinstating service between Pittsburgh and London and expanding service at London's Heathrow airport.

Leadoff witness U.S. Department of Transportation secretary Rodney Slater testified that the U.S. aviation relationship with the United Kingdom "stands in stark contrast to the worldwide move toward liberalization," adding that the United Kingdom "is in imminent danger of being left behind as the global aviation marketplace intensifies." In response to a British request to consider phasing in an open skies regime, the United States has been willing to introduce liberalization progressively, he said. Yet, as the failure of one negotiating round after another was described, Slater underscored that U.S. efforts continue to be met with "British retrenchment."

There is no more "potent example of the perverse economic consequences" of the restrictive U.K. bilateral than the current situation at Pittsburgh, where the United States does not hold authority to launch replacement service to London following the pullout of British Airways last fall, Slater said. Although the United States has "worked aggressively" to construct a solution, British negotiators "were caught between the opposition of BA to the broader Heathrow initiative and of British Midland Airways--a U.K. carrier seeking to begin Heathrow-U.S. service--to a smaller Pittsburgh-specific approach."

Because of this opposition, the U.K. delegation "merely reiterated proposals that we had rejected as unacceptable when we met earlier in January," said Slater. He described the U.S. situation as "tantamount to a person with a stone in his shoe being told that the only way to address the problem was to buy a new pair of shoes."

House transportation and infrastructure committee chairman Bud Shuster (R-Pa.) and ranking member on the committee James Oberstar (D-Minn.) last month wrote to Slater, urging him to explore all possible options to ensure that a new U.S.-U.K. aviation agreement is reached. Shuster and Oberstar listed a number of remedies potentially available to the United States to redress terms in the bilateral.

While the two lawmakers took no position on the appropriateness of any of these remedies, they suggested revoking all slots and slot exemptions held by British carriers at all U.S. slot-restricted airports; prohibiting the operation of the Concorde by BA in the United States; rescinding current exemptions or permits under the bilateral to prohibit flights by British carriers to the United States; and outright renunciation of the current bilateral.

US Airways chairman Stephen Wolf said the United Kingdom continues to defend the current aviation agreement to accommodate "the entrenched interests" of British Airways. The United States "should not pay a Queen's ransom" to the British to gain Pittsburgh-London rights, he said, and "should not tolerate this international embarrassment any longer." He urged the U.S. government to "carefully consider its alternatives," then act "immediately and decisively" to bring the stalemate to an end.

Sir Michael Bishop, chairman of British Midland, also testified, telling panel members that his carrier has been "seriously preparing" over the past two years to be in a position to operate U.S. service, but is unable to do so due to the restrictive terms in the air services agreement. "In short," he said, "we are ready, willing but not yet able to start services. For all the issues in which there is harmony between our two countries, no trade issue, to my knowledge, causes more rancor, suspicion and bad feeling than this agreement."

Bishop listed the initiatives that his company has undertaken to break the impasse, saying that British Midland launched a campaign, "Make the Air Fair," to highlight the high cost of business class travel from Heathrow to the United States. "These high fares are bad news for the consumer, for business and for the United Kingdom," he said.