| Author (Person) | Bower, Helen | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Publisher | ProQuest Information and Learning | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Title | In Focus | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Details | 1.3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Publication Date | 03/03/2003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Content Type | News, Overview, Topic Guide | In Focus | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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With the European airline industry bracing itself for a downturn, sparked by a possible war against Iraq, the European Commission proposed two initiatives on 26 February 2002 [IP/03/281] that aim to increase the competitiveness of Europe's airline industry by making it easier for companies to make new alliances. The proposals follow a ruling by the European Court of Justice on 5 November 2002 in which the ECJ concluded that the bilateral aviation deals signed between individual EU Member States and other countries break European Community rules and infringe on the EU's external competence. The ruling has empowered the European Commission to pursue its aim of developing an international air transport policy, whereby it would be responsible for negotiating bilateral agreements between EU Member States and countries elsewhere in the world. Commenting on the proposals, Loyola de Palacio said that such a move would benefit both the industry and consumers:
Background The role of the European Commission in international air transport was first raised in 1998 when the European Commission brought cases against seven Member States - Denmark, Sweden, Finland, Germany, Belgium, Luxembourg and Austria - who had all negotiated bilateral "open skies" agreements with the United States during the 1990s. A further case was brought against the United Kingdom because of its aviation deal with the United States, the Bermuda II agreement, which dates back to 1977 although it is more limited than the other deals struck between the United States and other Member States. The European Commission argued that the bilateral deals broke single market rules and hampered competition between European airlines at a time when the European Union was trying to liberalise the sector in line with the development of the internal market. The first indication of the Court's opinion came in January 2002 when Advocate General Antonio Tizzano, issued his preliminary findings. Tizzano said the current bilateral open skies agreements involved "a case of discrimination based on nationality", which was illegal under the EU treaty. Meanwhile the European Commission has considered taking action against a further four Member States - the Netherlands, France, Italy and Germany - who have also signed bilateral "open skies" agreements with the United States. The final ruling of the European Court of Justice was taken on 5 November 2002. The EU institution, based in Luxembourg, ruled that the eight Member States had indeed broken European Community law by entering into bilateral agreements with the United States. The Court found that the Member States had acted illegally because they had infringed on the EU's external competence by negotiating bilateral arrangements and, in addition, they had infringed on the of the right of establishment because the deals included a clause on ownership and control of airlines that constitutes national discrimination. An EU international air transport policy The European Court of Justice ruling paved the way for the European Commission to develop an EU international air transport policy in tandem with its plans to create a Single European Sky. As a first course of action on 20 November 2002 [IP/02/1713] the European Commission called on all those Member States concerned to activate their provisions for denunciation of any bilateral arrangements and to refrain from taking international aviation commitments of any kind until their compatibility with Community law could be checked. At the same time the European Commission announced its intention to urge the Council of the European Union to agree a mandate for negotiations on a Community level bilateral agreement with the United States whilst the Commission itself would prepare proposals on future EU arrangements with other third countries. The legislative package, announced on 26 February 2003 [IP/03/281], proposes three key measures in the field of air transport, namely:
In essence, the legislative package grants the European Union more power in the field of air transport because the EU institution would be entitled to require information, rather than merely ask for it; to implement decisions, rather than simply "suggest appropriate measures" for Member States to adopt; and to impose fines. Traffic rights to and from the EU would also no longer be reserved to national flag carriers but are open to airlines that are controlled and owned by European interests. In addition to the legislative package on "open skies" the European Commission also adopted a proposal on 26 February 2003 [IP/03/284] that would give it enforcement powers for the application of the European competition rules to air transport between the European Union and third countries. The proposal concerns Regulation 1/2003 and suggests removing the provision that currently excludes from its scope air transport between the EU and third countries so that all fields of transport will be covered. The European Commission also proposed that it should have the power to grant block exemptions in cases between EU and non-EU airlines as it can already do at present in the case of air transport between European airports. At present there are two such block-exemptions and they concern tariff consultation for interlining and the allocation of landing and take-off slots at airports. A Future EU International Air Transport Policy: Better for the industry and consumers? The proposals have generally been welcomed by the European airline industry who support the European Commission's position that EU-wide agreements will increase competitiveness in the industry thereby reducing the costs for consumers. In particular, the European Commission has been praised for stepping back from its earlier position, which demanded the cancellation of all bilateral arrangements - a demand which was unlikely to be met by the EU's Member States who feared that the European Commission would gain too much power over air transport. Commenting on the proposals, David Henderson, information manager for the Association of European Airlines, said:
Although the European Commission has suggested that the creation of a common European aviation area will benefit consumers because different national carriers will compete for key routes, for example British Airways competing for transatlantic routes out of Paris, airlines analysts have suggested that the proposed legislation is unlikely to have such an effect. Instead, it is expected to lead to increased consolidation within Europe with a few larger companies operating on long haul routes and more smaller companies competing on short and medium-haul flights. Whatever the effect on the structure of the European airline industry itself, the new legislation should reduce the current confusion that exists in the sector and allow the European Commission to establish a Common European Aviation Area to complement the planned Single European Sky. But first the European Parliament and the Council of the European Union must approve the proposals, following initial consultations in March with the European Commission hoping that it will have the go-ahead to negotiate an EU-US arrangement by June 2003. Further information within European Sources Online:
Further information can be seen in these external links: EU Institutions European Commission News Organisations
Helen Bower 1 March 2003 Two initiatives that aim to increase the competitiveness of Europe's airline industry by making it easier for companies to make new alliances were proposed by the European Commission on 26 February 2003. |
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| Subject Categories | Mobility and Transport | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
