Brussels 8 June 2017 – the European Commission has followed up on its 2015 aviation strategy by launching a series of initiatives under the banner ‘open and connected aviation’. The Commission’s initiatives include issues of ownership and control and unfair competition as the EU seeks to maintain the competitiveness and health of its aviation industry.
In December 2015, EU commissioner for transport, Violeta Bulc, announced a comprehensive set of measures to ensure that the EU’s aviation sector could continue to compete on a global level. The EU commissioner for transport has now developed this further with four key initiatives that address unfair competition, ownership and control, air traffic management and public service obligations.
Despite positive attempts at bilateral discussions between the EU and the Gulf States, certain European carriers continue to raise concerns about perceived unfair commercial practices and unequal operating conditions that may distort competition. This mirrors similar disgruntlement of US airlines who have been far more vocal and busier in lobbying its authorities over challenging the Middle East Three (M3) carriers. Ms Bulc did not specifically refer to the M3, but it is hoped that the initiative’s regulatory proposal on safeguarding competition in air transport will be more effective than Regulation (EC) 868/2004 by giving the Commission greater investigative powers and take compensatory measures to correct any wrongdoing.
The Commission has also ‘urged’ the European Council to open bilateral negotiations with Bahrain, China, Kuwait, Mexico, Oman and Saudi Arabia as well as ratifying the signature of the draft aviation agreement with Ukraine.
Ownership and control
Through this initiative, the Commission will introduce interpretative guidelines on third country ownership and control of EU airlines. The main purpose of this guidance is to give some clarity and certainty for third country investors. That may eventually include the UK, but given the recent general election result this truly ‘remains’ to be seen. However, Ms Bulc stopped short of relaxing the 49.9% ownership rule in respect of non-EU nationals. There are currently no plans to make any changes to Article 4(f) of Regulation (EU) 1008/2008 on the Operation of Air Services in the Community (‘Air Services Regulation’).
Air traffic management
Another set of interpretative guidelines will be drafted to encourage all stakeholders, including airlines, trade unions, regulatory authorities and member state governments, to adopt better working practices to ensure disruption is kept to a minimum as a result of periodic ATC strike action. The Commission seeks to balance rights to take industrial action with passenger protection in event of delays and cancellations. This is noble aim since between 2005 and 2016, more than 243,000 flights were cancelled due to ATC strikes. It affected approximately 27 million passengers.
Public Service Obligations (PSOs)
Finally, a third set of interpretative guidelines will enable member states to develop PSOs with airlines that meet the connectivity needs of local communities whilst not adversely impacting on airline competition rules. The provisions of Articles 16 to 18 of the Air Services Regulation have historically not always been applied in a consistent way.
Although the unfair competition initiative is the only legally-binding proposal, guidelines in each of these areas is broadly welcome as the aviation in EU recasts itself to face the ever more turbulent geopolitical atmosphere.