U.S. and British officials yesterday expressed satisfaction with the terms of a new air transporration agreement hammered out in London just minutes before the old one expired.
In general, the new accord limits London-U.S. routes to one U.S. carrier and one British carrier each, except for New York and Los Angeles, which can have two each; adds to the number of U.S. cities connected to London by nonstop flights; and limits the authority of U.S. airlines to pick up new passengers in London and Hong Kong on flights originating in the U.S. and carry them on to other cities in Europe and Asia.
The agreement also contains a mechanism which is designed to discourage carriers from adding new flights which might flood a route with an excessive number of seats - a prime British allegation - but at the same time allow carriers to increase the number of flights when a growing market appeared to justify it.
President Carter yesterday said he was pleased with the agreement, which would insure that air service between the two nations "will continue to function in an atmosphere of healthy competition - an atmosphere which will benefit consumers and airlines alike."
At a news conference yesterday, Transportation Secretary Brock Adams said the U.S. had sought to meet the "legitimate concerns" of the British while maintaining its position of freedom of choice for the American traveling public.
"When the negotiations started nearly 10 months ago, the British government was insisting that British airlines carry 50 per cent of the trans-atlantic passengers and they the U.S. would have no rights to fly beyond London to other European cities," he said. "We rejected these proposals because we could not submit to having our passengers assigned from one air service to another in the U.S. or as they traveled from country to country."
Although they won no guarantee that their carriers would get half the traffic between the two nations, British officials appeared happy with the pact, British Trade Secretary Edmund Dell said in London the agreement was "sensible and suits both sides.
"This agreement gives United Kingdom airlines a better opportunity to fight for a greater share of a growing market," he said. He suggested that the mechanism outlined to eliminate excessive capacity could help lower fares.
William T. Seawell, chairman of the board of Pan American World Airways, which will be significantly affected by the new pact, didn't appear happy with it but indicated the carrier could "live with" it. While it transfers "net economic benefit from the U.S. flag system to the British flag," Seawell nevertheless called it a "workable situation." Under the agreement, Pan Am loses its exclusive route from Seattle to London and the right to pick up new passengers in London and carry them on to some cities in Scandinavia and Eastern Europe (some cities not now served).
Pan Am must also, like Trans World Airlines, give up either its San Francisco-London or its Boston-London route, Both carrier currently operate both routes, but after October, only one U.S. carrier will be permitted on each. The procedures for deciding who gives up which route, and who gets additional routes which are to be awarded, are to worked out later by the Civil Aeronautics Board with the President's approval.
Each side and each carrier appears to lose and gain something in the new pact. Some specific provisions:
Airlines of both countries get air rights from four U.S. cities to London. In the first three years of the agreement, U.S. airlines will be authorized to serve Atlanta and Dallas/Ft. Worth nonstop to London while a British carrier will get a Houston-London route. After the first three years, airlines of both nations will be authorized to operate these routes, and another U.S. city may be selected by the U.S. for new nonstop authority to London.
A British carrier gets a Seattle-London route, the U.S. gets new operating rights to Singapore, a U.S. carrier can operate from Anchorage to London (now operated by British Airways), and British Airways is permitted to operate nonstop from San Francisco to London (it now has to stop in New York).
Under the "capacity" mechanism, carriers seeking to increase their number of flights on a route over the previous season will notify its government. The proposal would then be submitted by the carrier's government to the other. If there was no objection, it would go into effect. If there was an objection, the two governments would consult. If they could not agree, an automatic mechanism would come into play: the carrier could increase the number of flights on the route by 20 in the peak summer season or by 15 in the off-season, or by the equivalent of the percentage of growth in the market the preceding season, which ever is higher.
"This was not a win-or-lose proposition: we both won," U.S. chief negotiator Alan S. Boyd said yesterday. "The airlines won and the public won."
The new agreement, which replaced a pact signed in Bermuda in 1946, is to be formally signed in Bermuda sometime in July.