The First Multilateral Open Skies Agreement
On November 15, 2000, agreement was reached between the United States and four of its aviation partners for a comprehensive liberalization of aviation services: the first multilateral Open Skies agreement. Brunei, Chile, New Zealand, and Singapore, countries from diverse areas of the globe, agreed with the United States to unrestricted service by the airlines of each country to, from, and beyond the other’s territory, as well as unrestricted destinations (except cabotage), routes, number of flights, and prices charged. This multilateral accord was finalized in 2001 and it has been subsequently joined by Samoa, Tonga, and Mongolia.
Deregulation and the United Kingdom
In contrast to the apparent worldwide move toward liberalization, efforts to secure agreement with the U. K. failed, and the restrictions in the current bilateral agreement between the United States and Britain, known as Bermuda 2, are severe. Bermuda 2 was signed 30 years after the original agreement between these countries,6 and while the new agreement relaxed some of the requirements and restrictions of the original pact, air transportation between the two countries remained heavily constrained. This “anachronistic agreement,” as labeled by the Secretary of Transportation,7 still limited the number of cities in the two countries that can be served, the number of airlines that can serve the market, the fares that can be charged, and the level of service that can be provided. Under Bermuda 2, for instance, only American Airlines and United Airlines were allowed to serve Heathrow airport.8
According to the DOT, the U. K. position is nothing other than protectionism of British Airways, which opposes entry into the world of free and fair competition. The effect of the British position has created a degree of British isolation in an increasingly progressive European aviation community.