British Midland to campaign against `exorbitant' air fares

BRITISH MIDLAND, the country's second biggest scheduled airline, is to launch a high-profile campaign backed by leading business organisations and individuals, to persuade the UK and US governments to phase in an open skies agreement across the Atlantic.

The campaign will highlight the "raw deal" that business class travellers are getting and the "exorbitant" air fares they are forced to pay because of the lack of competition on transatlantic routes. BM will enlist the support of organisations such as the Confederation of British Industry, the Institute of Directors and the Air Users Council in a direct appeal to Downing Street.

The campaign is also likely to feature full-page press advertising in the run-up to the party conferences in September. BM claims that the price of a business class return from Heathrow to New York could be cut by up to pounds 1,000 if the restrictive air services agreement between the two countries, known as Bermuda II, was replaced by an open skies deal phased in on an incremental basis.

It also claims that once British Airways introduces its "sky beds" for business class passengers on Boeing 777 services across the Atlantic, then the price discrepancies will become even more acute.

The Bermuda II agreement allows only four airlines - British Airways and Virgin Atlantic of the UK and American Airlines and United Airlines of the US - to fly across the Atlantic from Heathrow. BM has been awarded licences to operate from Heathrow to New York, Boston, Washington and Miami but cannot use them until an open skies deal is agreed.

Open skies talks between UK and US negotiators, which were due to have resumed this week, have again been postponed. If a breakthrough cannot be achieved by the end of this year then, the open skies talks will be stalled altogether by the start of campaigning in the US presidential elections, jeopardising the prospects of a new agreement being signed for several years.

BA is insisting that any open skies deal that gives US carriers more access to Heathrow be accompanied by anti-trust approval for the phased introduction of its alliance with American Airlines. But BM is urging the Deputy Prime Minister, John Prescott, and his opposite number in the US, Rodney Slater, to introduce open skies regardless of whether there is approval for BA/AA and allow airlines to fight for the necessary slots at Heathrow.

BM says there would be no need for BA to surrender slots and that other US airlines such as Delta and North West could obtain sufficient slots from their partner airlines, Air France and KLM, to operate competitive services from Heathrow.

Mr Prescott is understood to be sympathetic to BM's case.

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