Virgin Atlantic and British Midland are still fighting it out over Moscow route rights. The two rivals are taking their cases for a new London Heathrow to Moscow route back to the UK's Civil Aviation Authority after John Prescott, the UK Secretary of State for Transport, ruled that it had wrongly considered Virgin's evidence.
The CAA had originally awarded the route rights to Virgin, but Prescott ruled that the CAA had wrongly accepted the airline's tacit agreement with Russian carrier Transero as part of its evidence. This was irrelevant, said the minister, as whichever airline won the rights would have had to make a deal with Transero.
The dispute comes after a new bilateral agreement between Russia and the UK was signed in the middle of this year, giving each country a single new carrier on the London to Moscow routes. Unusually, the designated carrier from each country would have to share the daily flights between them, forcing the successful carriers into an agreement.
Russia appointed Transero, so whichever UK carrier won the rights would be forced to work with it. Virgin says it was only doing its homework in advance by coming to an arrangement with Transero before the original CAA hearing in August.
British Midland says that, in terms of consumer service, "-we couldn't understand why it wasn't given to us in the first place."
Managing director Austin Reid highlights BM's "...experience in eastern Europe". Its Warsaw service, which it launched in July, is already 15% ahead of budget, says Reid, and the carrier has plans to launch services to Hungary.
The airline also points to its hub system at Heathrow, which it says could feed easily into its Moscow route.
Virgin retorts that 90% of the traffic is point-to-point, rendering that argument almost irrelevant. A second hearing was set for 26 November and both airlines seemed equally confident of winning the rights second time around. Both also say they are committed to the route, despite falling passenger numbers in recent weeks to and from Moscow's Sheremetevo Airport.
"Russia is traditionally a very strong market and remains, not withstanding the current state of the economy," says BM's chairman, Sir Michael Bishop.
"We believe the route will be profitable in the first three years," adds Reid.
Source: Airline Business
