For those who are unfamiliar with the bizarre intricacies of commercial aviation bilateral agreements, one might simply believe that if an airline from the United States wanted to fly to a foreign country, they could simply do so. If 
United Airlines
wants to start flying nonstop to a city in the United Kingdom, one might think that it is a simple matter of paying airport fees, negotiating terms with an airport, and then selling tickets.
However, the truth is a bit more complicated. Dozens of different international agreements between governments regulate exactly how many and what kinds of flights can be operated between different nations, and what the process is for a carrier looking to launch a new flight. Fortunately for legacy airlines, the vast majority of air travel markets today are protected by Open Skies agreements, which allow for mostly unlimited travel between nations with relatively few limitations. However, the system of free and open skies that exists today is relatively new, and carriers in the past were not fortunate enough to have this level of flexibility.
The United States and Europe are two of the world’s largest and most closely interconnected air travel markets, and the hundreds of daily flights that connect the two continents today were once something not so easily taken for granted. The process of developing bilateral air travel agreements took years, and nations did not come up with these kinds of regulations overnight, but rather as the process of decades of negotiation and continual modification of existing agreements governing air travel.
A controversial process that took years to come to a consensus on
In the early years of aviation, there was extensive debate about the purpose that air transportation should serve. For starters, air transportation brings along with it massive economic benefits to local economies. The development that can arise from new air transport lines can be extremely beneficial. However, there was some discussion as to who should be prospering from this kind of development.
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Some often worried that the arrival of European carriers in certain markets could harm US airlines, and might eventually result in American jobs being lost to foreign airlines. On the other hand, many Europeans were skeptical of more flights from US carriers, as they believed that their airlines should prosper because cities in Europe were increasingly becoming more and more important tourist destinations.
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As one can see, these kinds of discussions became more and more controversial as air transport became more and more widespread. In this article, we will take a deeper look at the history of bilateral air travel agreements governing the relationship between civil aviation in Europe and the United States.
Bermuda I was the first agreement to establish guidelines for transatlantic flights
The Bermuda Agreement of 1946, which has since become known as the Bermuda I Agreement, was the first major bilateral air transportation agreement of its kind and was signed by the United States and the United Kingdom. This transportation agreement established clear guidelines for civil aviation between the two nations, and it set a precedent that more than 3,000 agreements worldwide would eventually follow.
The agreement had a few key provisions, the most notable of which being that it defined specific routes for international carriers based in each country and allowed them to pick up or deplane passengers at certain international destinations. One important provision in these agreements was that transporting passengers domestically was forbidden in the other nation. The agreement also established guidelines and definitions surrounding fair competition and granted the International Air Transport Association (IATA) immunity from US antitrust laws when it determined transatlantic flight pricing.
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The agreement also gave Britain extensive fifth freedom rights, which were needed in an era where aircraft ranges were significantly shorter. This allowed British carriers to serve colonies across the globe while stopping in the United States to refuel if necessary. The agreement allowed the United States and Britain to come to terms on the UK’s need to limit transatlantic capacity and the US’s to have as competitive of an environment as possible.
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The agreement facilitated the immediate growth of transatlantic aviation and allowed major airlines like Pan American World Airways and BOAC to rapidly expand their international networks. The agreement also had a major impact on how these nations negotiated air travel agreements with foreign nations. In the recently published 2025 book Strategies for Sustainable Air Services Development, Kareem Yarde and Chrystal Yang analyze the impact of Bermuda I as follows:
“The United States and the United Kingdom began incorporating the principles of the Bermuda I agreement which they had mutually negotiated into other air service negotiations with third states. As these principles became more widely adopted across nations, a complex global web of generally restrictive agreements emerged.”
In 1977, the two parties updated their guidelines with the Bermuda II Agreement
By the 1970s, many airlines had begun to complain that the Bermuda I Agreement was too restrictive, and thus the United Kingdom and the United States renegotiated a second bilateral air services agreement which was signed on July 23rd, 1977, according to Flight International. This agreement was significantly more restrictive than the one that came before it, but it did pose some significant limitations, at least in comparison to how airlines operate across the North Atlantic today.
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The agreement specified that only a few specific US gateways could operate flights directly to London Heathrow Airport (LHR), while others were restricted to using the less-well-connected London Gatwick Airport (LGW). Aerospace regulators in both the United States and the United Kingdom had to approve any new routes. Furthermore, each side was allowed to designate a pair of airlines as “flag carriers” for any major set of routes.
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The US carriers, which had previously enjoyed extensive fifth freedom rights, saw these freedoms mostly eliminated by Bermuda II, an issue that was less relevant in an era of longer-range aircraft like the Boeing 747. The new arrangement allowed some British carriers like British Caledonian and Laker Airways some significant competitive advantages on many routes, such as serving Heathrow instead of Gatwick. Regulatory measures were also put in place to ensure that US carriers could not simply lower prices to push British airlines out of certain markets, before proceeding to raise fares again.
The agreement would later be revised in 1981 when Gatwick was formally codified as the primary US gateway for any routes not outlined in the initial Bermuda I Agreement. A later revision in 1991 changed some language to account for the bankruptcies of Trans World Airlines (TWA) and Pan Am, while also allowing for Virgin Atlantic to fly from Heathrow. In 1995, some restrictions were relaxed further, allowing US carriers to serve UK airports outside of London. In 1997, the agreement was once again revised to account for routes from Hong Kong to the US now being subject to Chinese air travel agreements following the territory’s handover to China.
A final agreement would be enacted in 2008
The formal EU-US Open Skies Agreement, which became effective on March 30th, 2008, allowed any airline based in the United States or the European Union to operate flights between any destination pair across the Atlantic. This agreement also extended fifth freedom rights ubiquitously. Additionally, European Common Aviation Area nations like Switzerland which are not part of the European Union were also subject to this agreement.
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Norway and Iceland would go on to join the agreement in 2011, and the treaty would later be revised slightly in 2010 following criticisms that the agreement mostly favored US-based airlines. The agreement ended the Bermuda II Agreement’s strict controls over Heathrow Airport and ended the exclusive access to the facility enjoyed by British Airways, Virgin Atlantic, United Airlines, and American Airlines. This led airlines like Delta, Northwest, and Continental to launch flights from Heathrow, and led to slot prices at the airport rising even higher. This agreement also allowed for the emergence of low-cost transatlantic airlines, although the original carriers that attempted to operate with this model all mostly failed. Following the UK’s exit from the EU in 2018, a new bilateral air services agreement was formed between the two parties which offers mostly unrestricted flights between the two countries.
