Questions about the 1977 "Bermuda II" bilateral between the UK and the US arise on a regular basis, so I prepared this primer to address most of the relevant questions that might arise regarding this treaty. The specific details of Bermuda II are very complex, but I'll try and explain them in brief below.
a) Only two US and two UK airlines may operate to the US from LHR. Currently these are UA, AA, BA and VS.
b) ONLY the following cities may be served by US airlines from London : ANC, ATL, BOS, CLT, CHI, CVG, CLE, DFW, DTT, HOU, LAX, MIA, MSP, NYC(%), PHL, PIT(*), SFO(%), SEA, STL, WAS(%)
c) ONLY the following cities may be served by UK airlines from London : ATL, BOS, CLT, CHI, DFW, DEN, DTT, HOU, LAS(*), LAX, MIA, NYC(%), ORL, PHL, PHX, PIT, SAN, SFO(%), SEA, TPA, WAS(%)
d) ONLY the following cities may be served from Heathrow : ANC, BWI, BOS, CHI, DTT, LAX, MIA, MSP(@), NYC, PHL, SFO, SEA, WAS(%)
e) Some destinations are switchable with unused destinations. The other approved gateways without current service are FLL, HNL, MKC, PDX, MSY
f) No service to any cities mentioned in (e) may be introduced without dropping an existing route on either side.
g) Any US city may be served from any other UK airport (including STN) with no restrictions.
h) Each country may designate only TWO routes on which TWO of its carriers may compete. Every remaining route must have only one carrier from each side. However, if the number of passengers carried TOTALLY on the route (including traffic carried by fifth freedom carriers Air India, Air New Zealand and Kuwait Airways) exceeds 600,000 in two consecutive years, or if the number of passengers carried by any single airline exceeds 450,000 for two consecutive years, then each side may designate an additional airline to serve the route.
i) US carriers may operate fifth freedom services between LHR and BER, FRA, HAM and MUC only(&). UK carriers may not operate cabotage within the United States. Air India (#) and Kuwait Airways may operate fifth freedom service between LHR and NYC. Air New Zealand may operate fifth freedom service between LHR and LAX.
j) US and UK carriers operating indirect flights between the US and London may not offer fares lower than the lowest published fare offered by a carrier offering nonstop service in the same market.
* - LAS was approved as an additional service destination in an April 2000 modification to the agreement in exchange for PIT being approved as a US carrier gateway.
# - Air India was granted additional fifth freedom rights for LHR-ORD in 1998 and are currently seeking rights for LHR-LAX. Air India's fifth freedom awards predate the Bermuda 2 agreement and AI has been serving the LHR-JFK route continuously since 1962, making them the longest serving airline in the UK-US market with longer tenure than any carrier from either the UK or the US.
@ - Service on LHR-MSP may be operated by a US carrier only. UK carriers may not service MSP.
% - NYC includes JFK/EWR. WAS includes IAD/BWI. SFO includes SFO/OAK/SJC.
& - UA's fifth freedom service LHR-DEL on their RTW flight was extra-bilateral in nature and subject to additional restrictions on traffic. UA was not permitted to provide for fifth freedom sale capacity in excess of 38% of that offered by BA/AI on the LHR-DEL route. The service by VS on the LHR-DEL route is done utilizing unused AI frequencies as an Indian carrier and hence counts towards the Indian figures rather than the British figures.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada