Air transport – Commission becomes chief negotiator, June 2003

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Series Details 6.6.03
Publication Date 06/06/2003
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An 'historic decision' was how Commission Vice-President Loyola de Palacio - responsible for the Transport and Energy portfolio - described an agreement by EU Transport Ministers on 5 June to give responsibility for key air transport negotiations to the European Commission.

'Today we have reached a deal that will enable the European Union to assert itself at international level and to work for the benefit of its consumers and its aviation industry' said the Vice-President.

The package agreed by Ministers comprises three elements:

- A Council Decision on authorising the Commission to open negotiations with the United States in the field of air transport

It was a dispute over bilateral agreements with the US which caused the European Court of Justice to rule, in November 2002, on the legality of arrangements between eight EU Member States and the US. The agreements were found by the Court to be illegal on two counts: 'they contain commitments on areas that are covered by Community law, when only the Community itself can make such commitments [and] they restricted access to the air transport market between each Member State and the US on the basis of nationality.'

That ruling resulted in the new agreement and the decision to authorise the Commission to negotiate with the US on aviation policy, including such issues as 'traffic rights, routes, capacity, frequency, slots, fares, application of competition rules, high standards of safety and aviation security.'

Europe and the US are already the world's largest air transport markets, with flights between the two accounting for 40% of global aviation; the creation of an Open Aviation Area could lead to 17 million extra passengers being carried each year, 'consumer benefits of at least $5 billion a year', and more jobs in the industry.

With the Commission now able to deal with the US on behalf of all EU Member States, presenting a united front, the EU should have a stronger hand in future negotiations. Loyola de Palacio confirmed that the Commission would be opening negotiations with the US 'within a month'.

A spokesman for Virgin Atlantic, quoted by the BBC, said 'If negotiations with the Americans are successful ... this opens up the prospect of a radical restructuring of the world's aviation business'. Industry observers think an 'open skies' deal could lead to a number of mergers between European airlines.

- A Council Decision authorising the Commission to open negotiations with third countries on the replacement of certain provisions in existing bilateral agreements with a Community agreement

The Commission will also be responsible for negotiating changes to existing bilateral agreements on air transport with other countries, with the aim of bringing them into line with Community law and tackling problems similar to those identified by the Court of Justice in relation to the US.

As a matter of priority, the Commission is to identify countries with which it is thought 'open skies' agreements can be negotiated.

- A proposal for a Regulation on the negotiation and implementation of air service agreements between Member States and third countries

In addition to the two specific Decisions, a proposed Regulation will give the Commission a general negotiating mandate in the field of aviation.

Given the 'immense and extraordinary task' involved in renegotiating hundreds of current bilateral agreements, Member States will also be able to conduct negotiations - although within an agreed framework which takes account of common interests. The Commission and Member States will identify those countries with which negotiations should be opened as a priority.

Details of the framework still have to be confirmed, but the system will effectively start immediately.

Links:

European Commission:
05.06.03: New Era for Air Transport: Loyola de Palacio welcomes the mandate given to the European Commission for negotiating an Open Aviation Area with the US [IP/03/806]
05.06.03: Q&A on the air transport agreements with third countries [MEMO/03/124]
 
Council of the European Union:
05.06.03: 2515th Council: Transport, Telecommunications, Energy - provisional version
 
BBC News Online:
05.06.03: Brussels wins air power
 
European Sources Online: In Focus:
11.11.02: Air transport: European Court of Justice ruling opens the way to a Trans Atlantic Common Aviation Area, November 2002
06.12.02: Single Sky - agreement reached, December 2002
01.03.03: Air transport: European Commission seeks to develop international air transport policy, March 2003

Eric Davies
Researcher
Compiled: Friday, 6 June 2003

EU Transport Ministers agreed on 5 June 2003 to give responsibility for key air transport negotiations to the European Commission. Keywords: European Aviation Area

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