De Palacio flies in to propose new powers over aviation sector

Date: 27/02/03

By Karen Carstens

THE European Commission yesterday (26 February) put forward proposals to shore up its powers over the EU's aviation sector.

The Commission adopted a package of measures in a bid to create a truly open European aviation market, albeit one which could take years to create.

"With the structured approach and distribution of tasks we are proposing the EU can finally pull together in this field and work to develop international air transport to the benefit of the industry and consumers," said Loyola de Palacio, the transport and energy commissioner.

"This also finally clears the way for the Council to agree on the opening of negotiations between the EU and US, which remains our uppermost priority."

Governments have so far been reluctant to relinquish the right to negotiate with non-EU countries, but a landmark European Court of Justice ruling last November found elements of existing bilateral "open skies" agreements with the United States illegal.

Yesterday, the Commission put forward a proposal for a "general negotiating mandate" over international aviation pacts.

It wants member states to stop clinging to the notion of "national" air carriers and give all EU airlines equal rights to fly to and from their airports.

The idea is to obtain the recognition of "Community carriers" by third countries, thereby unblocking consolidation within the EU airline industry by removing existing provisions that discriminate on the basis of nationality.

Transport ministers are expected to debate the measures at their next meeting in late March.

Andrew Cahn, director of government affairs at British Airways, welcomed the measures.

"This provides some clarity about how our traffic rights are to be negotiated in future, at a time when the industry is in crisis," he said.

"Our industry has some very old-fashioned rules governing it - we are stuck in the 1970s.

"This is another step down the road toward liberalising and opening up the market," he added.

Cahn said calls made soon after last November's Court ruling by de Palacio to immediately revoke the "null and void" pacts went too far.

These new proposals were a "much more pragmatic, sensible and balanced way forward" indicating that she had "dramatically pulled back" from her former "tough guy" stance.

Also yesterday, Competition Commissioner Mario Monti said he wanted to extend his powers to regulate airline alliances to those between EU and "third-country" carriers.

"This would end the present anomaly where the Commission has jurisdiction on an all-European alliance but not on an alliance with a US carrier, for example," the Commission said in a statement.

"Putting an end to this anomaly is all the more urgent in view of the recent European Court open-skies ruling, which recognises EU competence on air transport relations with third countries and is expected to lead to more consolidation in the sector," Monti said.

The Commission said it hoped the new regulation would come into force on 1 May, 2004.

The European Commission put forward proposals to shore up its powers over the EU's aviation sector on 26 February 2003.