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March 2008 is coming soon, and the open sky agreement coming to an end! There will be lots of european airlines cutting their short haul routes from LHR, to free slots for long haul, ie: Air France is launching a LHR to LAX from April 01. Northwest will have a direct service from LHR to DTW. I have heard that BA will fly from some key destinations from Europe direct to the US. There will be no need for passengers to transfer thru LHR based on that! We shall see it all…
I think you mean Open Skies is starting, as previously the outdated Bermuda II agreement restricted transatlantic flights from LHR to a cartel of BA/Virgin and AA/United.
LGW has always been Open Skies, but few carriers prefer to use that airport as it has fewer connections into Europe and only one runway, as well as being plagued with fog in the winter mornings.
Open Skies will bring greater competition from other European carriers, but most people seem to choose thier carrier based on national affiliation, so I would still imagine the incumbent legacy carriers will continue to grab a good share of the market, especially as their fixed assets (lounges etc) and frequency of service give them a more dominant position from the get go.
UK carriers have superior service to many potential European and American competitors, particularly in premium cabins, and this is where the money is.
With corporate agreements in place few business travellers would choose AF over BA or AA on the NYC/LHR routings, though we may see some moderation in fares as competition open up. This will not erupt into a fare war, as this would defeat the purpose of launching expensive new services.
In fact, I believe open skies will be a great benefit for UK and US based carriers; being able to fly on a fully flat bed from the US to a European destination without having to pass through LHR will be a great benefit, though sadly coming just as T5 opens and such transfers will be greatly improved and simplified.