Air India (AI) can now fly to USA or Canada using London as a transit point a total of 16 times a week.

The bilateral, which marks a liberalisation of air services between India and Britain, has also thawed the cold war between British Airways and AI.

BA and Virgin Atlantic have promised to provide active assistance to AI in its dealings with the slot co-ordinator at Heathrow Airport. "BA will help Air India with key people who decide on slot allocation at Heathrow Airport" said British Airways general manager Alan Briggs.

AI has all along maintained that the British Airline has so far been very non-coperative over AI's problem in getting the appropriate landing slots at Heathrow. AI, in turn, has opposed any concessions to BA.

The new bilateral permits BA to terminate all its 16 flights in India. Earlier, the airline could only terminate 11 of its 16 flights in India.

BA is also allowed to operate any number of these 16 flights to Chennai under the new agreement whereas earlier it could only operate four weekly services to the city.

Amongst other clauses, BA will now be permitted to combine Delhi and Calcutta in the same flight six times a week, up from the current three. AI, in turn, can operate its flights to any city in Canada via London whereas earlier it could only fly to Montreal and Toronto.

"We have signed a very good bilateral which indicates significant progress in providing better air links between India and Britain" said Briggs.

India and Britain also agreed in-principle on third country code sharing. That is, Air India and British Airways can sign code share agreements with airlines of third countries to cover the India-UK route.