Chris Jasper/LONDON Ramon Lopez/WASHINGTON DC

Airlines in the UK and USA are coming to terms with the failure of bilateral air services talks. British Midland (BM) - worst hit by the collapse of negotiations - has responded by filing a joint codeshare application with partner United Airlines that suggests it will launch transatlantic services with routes from Manchester.

BM had aimed to offer flights to the USA from its London Heathrow hub, but with a planned "mini-deal" in tatters, it is unable to. Only two UK carriers - British Airways and Virgin Atlantic - and two from the USA - American Airlines and United - are authorised to do so.

BM, however, should be able to launch US services from Manchester under the Bermuda 2 treaty, which allows unrestricted services from regional airports. Although it says the new filing for services to Chicago and Washington "is only an application", it confirms that, if services are launched, it will be "with our own metal", meaning that it will use four Airbus A330-200s it is believed to have ordered.

The collapse of talks on 28 January, aimed at amending Bermuda 2, has led to accusation and counter-accusation from both sides. Washington claims the breakdown was caused by the UK's protectionist stance which it says was meant to safeguard British Airways' position at Heathrow, while the UK maintains that the USA was unwilling to compromise on key points.

The talks had been expected to allow BM to fly to the USA as Heathrow's third designated UK carrier, with two US airlines - most likely Delta Air Lines and Northwest Airlines - getting reciprocal rights. A further session failed to reach agreement on US Airways' plans for flights from Pittsburgh to London Gatwick. US transportation secretary Rodney Slater claims to be "profoundly disappointed" by the breakdown.

London says it held out an olive branch in the form of fifth-freedom rights for cargo carrier FedEx to operate from the USA to Scotland's Prestwick Airport and into Europe, but the US carrier appears to have demanded similar rights at London Stansted. FedEx says it may pull out of Prestwick.

Source: Flight International