| Author (Person) | Bower, Helen | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Series Details | 11.11.02 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Publication Date | 11/11/2002 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Air travel between the European Union and other parts of the globe is set to become more competitive after the European Court of Justice ruled on 5 November 2002 that 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 decision in the so-called "open skies" cases means it should be easier for the European Commission to achieve its ambition of a Trans-Atlantic Common Aviation Area as well as benefiting European travellers who should pay less in the future as more airlines seek to compete on the same routes. Background In 1998 the European Commission brought before the European Court of Justice 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. These agreements aimed to liberalise air transport between the signing parties, they included the right to fly onwards from a destination to a third country. 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. In fact, all the Member States had agreed in 1992 to create a single market in air transport whereby all European airlines would have equal rights under the law to operate air services from their home base as well as being entitled to establish operations anywhere in the EU on the same term as the local airlines. In addition to removing the internal trade barriers the European Commission was also keen to establish a common external policy with third countries. Such a policy was favoured over bilateral agreements because the European Commission felt that these provided non-EU airlines with an unfair advantage over European carriers who were required to meet strict criteria in order to achieve that status. Furthermore, the Commission argued, bilateral agreements discouraged the consolidation of Europe's air industry into an economically stronger international business. Following the European Commission's decision to launch a court case the Netherlands joined in the argument in October 1999 in support of its EU counterparts. 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. European Court of Justice Ruling 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. Two key ways in which the Member States had acted illegally were identified by the Court:
A press release issued by the Court about the judgement highlighted the way in which the Member States were viewed to have acted beyond their remit. It said:
The status of the bilateral agreements is now unclear. Whilst the European Court of Justice may have declared certain aspects illegal, the United States is insisting that the aviation deals will continue to stand in international law despite the ECJ's ruling. European Commission to pursue Trans Atlantic Common Aviation Area and consolidate Europe's air industry What is clear is that the ruling will fuel the European Commission's long standing ambitions to create a Trans Atlantic Common Aviation Area [TCAA] and to consolidate Europe's air transport industry. The aftermath of the September 11 terrorist attacks in the United States has had a serious damaging effect on European airlines, [see The European Commission will now be seeking to encourage consolidation in Europe's air industry and mergers between airlines are more likely. Consumers are set to benefit from lower prices as more airlines compete on specific routes. In addition, the European Commission will have greater power to negotiate future aviation deals which it claims will benefit both passengers and airlines. The potential benefits of the ruling were summed up in a press release issued by Virgin Atlantic, which said: "Today's decision presents an historic opportunity for Britain and the European Commission in partnership to negotiate a deal with the United States. Our vision of the future is a complete deregulation of everything from routes and airline access rights, all the way through to changing ownership and control regulations which would allow mergers and acquisitions. This would bring aviation into line with other mature industries and bring in cheaper fares, a higher quality of service and a much more efficient industry...This historic decision will forever change the landscape of the US and Europe's aviation industry". The effects of the ruling are also likely to be felt across the whole of the global aviation market, not just in Europe and the United States but in Asia as well. The Centre for Asian Pacific Aviation suggested in an article on 7 November 2002 that the judgement " will change the shape of aviation over the next few years" and that "megalithic" European airlines would be created as a result of more mergers. The Centre also suggested that the decision would "revive the mega-bilateral TCAA discussions between EU and US governments" making a single North Atlantic market a distinct possibility within three years. The European Commission is certainly keen to negotiate a Trans Atlantic Common Aviation Area as it goes hand in hand with the EU's efforts to establish a Single European Sky whereby European airspace would be jointly managed by the EU and a common regulator would be established. If the plan for a TCAA gets the go ahead then it would become the world's leading air transport trading bloc that would dominate international aviation policy. The world's four busiest airports are located in the US and the UK alone. Clearly, the ECJ's ruling on the "open skies" cases brings to an end a period of confusion when several actors were trying to rule Europe's airways. It thus paves the way for one actor - the EU - to create one European sky that would be linked to other national or regional airspaces through extremely competitive aviation deals. Further information within European Sources Online:
Further information can be seen in these external links: EU Institutions European Commission
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Helen Bower A European Court of Justice ruling on 5 November 2002 that bilateral aviation deals signed between individual EU Member States and other countries break European Community rules should pave the way for the European Commission to achieve its ambition of a Trans-Atlantic Common Aviation Area |
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| Subject Categories | Mobility and Transport | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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