Transatlantic Air Routes (Hansard, 29 November 1993)

§ 4. Sir Ivan Lawrence
To ask the Secretary of State for Transport what progress he has made towards liberalisation of transatlantic air routes.

§ Mr. MacGregor
My aim is to work closely with the United States Government to meet the objective of agreement on liberalisation of UK-US air services by April next year. The refusal of the US Government to grant British Airways for a reasonable period the code-sharing rights to which it is entitled is a step backwards.

§ Sir Ivan Lawrence
Is it not shameful that our close friend and ally, the United States, should adopt such an outrageous posture in this matter? Working closely with the United States is clearly not sufficient to protect British airlines' interests because my right hon. Friend is, I presume, doing that already. What action does he propose to take, and when does he propose to take it, to hold the Americans to their international obligations?

§ Mr. MacGregor
I assume that my hon. and learned Friend is rightly referring to the US Government's decision to grant British Airways its code-sharing rights for only 60 days. That has nothing to do with the liberalisation talks that we are undertaking this year with the US Government. It is entirely to do with a breach of the "United States existing international obligations. We believe that it is breaching those in allowing British Airways only 60 days for its new code-sharing rights. That is wrong and we therefore have no option but to prepare for retaliatory action against US services that were introduced as a result of the Heathrow deal, from which BA's rights come. On 17 November, we accordingly warned the US Government that we proposed to limit United Airlines services to 772 Washington and American Airlines services to Chicago from 12 January—the date on which BA's code-share approval expires—unless the approval was renewed by the United States in the meantime. I am sorry to have had to take that action, but I believe that we had no option, given the United States decision.

§ Mr. Olner
I shall fully support whatever action the Secretary of State takes on transatlantic routes, especially those into Birmingham airport which are so badly needed for the west midlands.
In the light of the right hon. Gentleman's previous answers, may I advise him to put some money into the west coast main line, because it will soon be quicker to fly from Birmingham to America than to travel on the west coast line from Birmingham to Heathrow?

§ Mr. MacGregor
That simply cannot be right. However, I am happy to give the hon. Gentleman a positive reply. In our liberalisation talks, the position of regional airports is very much in our minds and we seek to increase the number of flights to regional airports. On investment in Birmingham airport, the hon. Gentleman will have been pleased to see the consideration that Birmingham airport is now giving to seeking private sector finance for its expansion.

§ Mr. Wilkinson
Will my right hon. Friend ensure that a robust stand is taken to protect the interests of principal British carriers, such as British Airways and Virgin, on transatlantic routes and to ensure that they have sufficient gateways into the US? Will he also ensure that, to reciprocate, we are more willing to accept US carriers wishing to come to under-utilised British airports such as Stansted? Was it not sad that Trans World Airlines was refused an air service agreement into Stansted?

§ Mr. MacGregor
I agree with my hon. Friend. I hoped that we could reach an interim agreement, while the main bilateral liberalisation talks were going on, to agree the TWA flights to Stansted in the summer. I put proposals to that end to my American counterpart and obtained some reciprocal benefits for the United Kingdom. I am sorry that, on that occasion, he could not agree and that he wanted to wait for the wider liberalisation talks. But I assure my hon. Friend that his point about flights to airports that still have capacity is very much in our minds.