Business class passengers will be the big winners from opening up Heathrow to more airlines on transatlantic routes.

The average business class return fare between Heathrow and New York, paid as part of a bulk corporate deal, is likely to fall from £2,500 to less than £2,000.

Those down at the back in economy will also benefit but there the savings will be much more modest, probably settling at 10 per cent on average, because there are already a great variety of cheap deals available.

Regional cities are likely to be the losers as bmi switches some of the slots it uses for domestic routes to start competing in the transatlantic market.

Nigel Turner, bmi’s chief executive, said that the airline would sacrifice its least productive flights to establish a handful of routes next year to key cities in the United States.

Frequency is likely to be reduced on some domestic routes, such as Leeds, Teesside, Inverness and Belfast, to free up slots for US flights.

Cheaper fares will trickle on to the market well before the open skies deal takes effect on March 30 next year.

In 1982, British Airways reduced its fares between Heathrow and Glasgow by 20 per cent in the months before British Midland, now known as bmi, began competing on the route.

BA will also accelerate the upgrade of its business class cabins and lounges to help prevent its big corporate clients from being lured away.

But the deal is unlikely to prove as damaging to BA as some are predicting. It still has 40 per cent of the slots at Heathrow and no other airline will be able to compete on frequency. BA flies eight times a day to New York JFK and three times a day to Newark.

Airlines that do not hold slots at Heathrow will have to pay around £10 million for a pair in prime time.

Some European airlines, such as Air France-KLM, may help their US alliance partners, such as Continental and Delta, to establish a foothold at Heathrow by handing them slots they use on European routes. Aer Lingus also has plenty of valuable slots it could sell.

However, the reality is that most competitors are likely to nibble away at the edges of the market, such as with Continental’s announcement yesterday that it will launch a Houston route from Heathrow next year.

Competing with BA on the most lucrative route, London to New York, is already difficult. Despite being one of only four airlines able to operate between Heathrow and the US, United Airlines abandoned the New York route last year after failing to make sufficient profit. The big threat to BA may come in the form of a business-class only operator, attracting customers who have grown accustomed to the exclusivity already offered by Eos and Maxjet, flying from Stansted.

The benefits flowing to passengers from open skies are likely to accrue only steadily but will surely be clear enough by 2010 to make it politically impossible for the Government to cancel the deal, even if the US reneges on its vague promise of greater liberalisation.

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