The agreement that governed scheduled air transport services between the U.S. and the U.K. until it was replaced in 1977, was signed on Feb. 11, 1946, and came to be known as the “Bermuda Agreement." Term is now commonly used for any agreements that contain capacity and pricing provisions patterned on the first U.S.-U.K. agreement. Such agreements include:
(1) Capacity Principles: Requirements that an airline’s capacity must meet in providing services over agreed routes.
(2) Designation: Each party is entitled to designate “an airline or airlines” for operation of services over the agreed routes, subject to appropriate laws and regulations;
(3) Pricing Article: This sets forth requirements for establishing prices to be charged by designated airlines for services over the agreed routes. The article specifies what consultative procedures are to be followed if a Party is dissatisfied with a price proposed by an airline, and ultimately allows that Party to exercise unilateral control if agreement is not reached.
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