Fresh attempt to resolve hotch-potch of aviation measures

Date: 15/03/01

By Renée Cordes

HAUNTED by the spectre of the ongoing war between the EU and US over 'hush-kitted' aircraft, Europe's major airlines believe they have found the perfect way to avoid such disputes.

The Association of European Airlines is urging the creation of a Transatlantic Common Aviation Area (TCAA), or a single set of rules to replace today's patchwork of bilateral accords.

"Ultimately you make the regulatory system much more uniform," says Kees Veenstra, the association's deputy secretary-general. "This way, the airline industry can operate more efficiently without being burdened by fragmented rules."

The plan, which won the support of Transport Commissioner Loyola de Palacio early in her term, calls for the full harmonisation of regulations and a step-by-step relaxation of regulatory barriers such as those governing competition, aircraft ownership and leasing. It also foresees the creation of a single, independent body to police the industry.

Supporters claim that under this scenario, the ugly dispute over the EU's ban on hush-kitted aircraft - which involved heavy US lobbying and culminated in Washington complaining to the International Civil Aviation Organisation - might never have happened. The ban is to apply to aircraft registered outside the EU from April 2002.

As early as 1996, Union leaders gave the European Commission a mandate to negotiate with the US on establishing a common aviation area. So far, the US has been reluctant to get on board, preferring to stick to bilateral accords negotiated with individual member states.

The EU has repeatedly challenged the legality of such accords, claiming that they discriminate against foreign competitors. Hearings on a number of cases are to take place at the European Court of Justice this spring.

But there is discord even within the Union's own ranks.

While the UK supports a common aviation area, policymakers would prefer to concentrate first on modifying the country's own 'open skies' pact with the US. Ireland is also reluctant to sign up to the TCAA idea, amid concerns about ensuring a division of labour between its Dublin and Shannon airports.

The campaign to set a common set of rules comes as an increasing number of carriers around the world band together, either in fully fledged alliances or code-share arrangements, to expand their networks.

Differing - and often contradictory - conditions attached to airline ownership, the treatment of partnerships, the nature of remedies applied and aircraft leasing often make it difficult for airlines to draw up long-term business plans.

The EU restricts foreign ownership of domestic airlines to 50%, while the US has a 25% threshold.

Both sides also apply different criteria in scrutinising tie-ups, with the Union often requiring carriers to surrender take-off and landing slots and reduce flight frequencies while the US requires anti-trust immunity. Europe's bilateral ties

Article forms part of a survey on EU-US relations.