Safeguarding competition in air transport

20-11-2017

This note seeks to provide an initial analysis of the strengths and weaknesses of the European Commission's impact assessment (IA) accompanying the above proposal, adopted on 8 June 2017 and referred to Parliament's Committee on Transport and Tourism (TRAN). The proposal intends to repeal Regulation (EC) No 868/2004 in order to 'ensure a fair level playing field between European and third country air carriers’ (IA, p. 44), ‘with a view to maintain conditions conducive to a high level of connectivity' (explanatory memorandum, p. 8). According to the IA, 'Regulation (EC) No 868/2004 intended to protect EU air carriers against objectively defined practices considered as "unfair" and "discriminatory", namely subsidisation and unfair pricing practices causing injury to EU carriers in the supply of air services to and from third countries' (IA, p. 34). However, for the reasons comprehensively outlined in the IA (pp. 34-36), the regulation 'has never been applied, and some of its features make it very unlikely that it will ever be (concretely) applied' (explanatory memorandum, p. 3). The proposal is part of the 'Open and Connected Aviation' package, which includes three other initiatives. The European Parliament has called for the revision of this regulation in a number of its resolutions, as it had proved inadequate and ineffective. The Council, in its conclusions adopted on 20 December 2012, called for a more ambitious and robust EU external aviation policy, based on the principles of reciprocity and open and fair competition in a level playing field. It considered that this regulation had proved itself unable to adequately address the specific characteristics of the aviation services sector and supported the Commission's intention to analyse possible options for a more effective instrument to safeguard open and fair competition. It also encouraged the Commission and Member States to 'use their bilateral and multilateral relations to actively support the establishment of a level playing field favouring open and fair competition in international air transport' (Recital 24, p. 4).

This note seeks to provide an initial analysis of the strengths and weaknesses of the European Commission's impact assessment (IA) accompanying the above proposal, adopted on 8 June 2017 and referred to Parliament's Committee on Transport and Tourism (TRAN). The proposal intends to repeal Regulation (EC) No 868/2004 in order to 'ensure a fair level playing field between European and third country air carriers’ (IA, p. 44), ‘with a view to maintain conditions conducive to a high level of connectivity' (explanatory memorandum, p. 8). According to the IA, 'Regulation (EC) No 868/2004 intended to protect EU air carriers against objectively defined practices considered as "unfair" and "discriminatory", namely subsidisation and unfair pricing practices causing injury to EU carriers in the supply of air services to and from third countries' (IA, p. 34). However, for the reasons comprehensively outlined in the IA (pp. 34-36), the regulation 'has never been applied, and some of its features make it very unlikely that it will ever be (concretely) applied' (explanatory memorandum, p. 3). The proposal is part of the 'Open and Connected Aviation' package, which includes three other initiatives. The European Parliament has called for the revision of this regulation in a number of its resolutions, as it had proved inadequate and ineffective. The Council, in its conclusions adopted on 20 December 2012, called for a more ambitious and robust EU external aviation policy, based on the principles of reciprocity and open and fair competition in a level playing field. It considered that this regulation had proved itself unable to adequately address the specific characteristics of the aviation services sector and supported the Commission's intention to analyse possible options for a more effective instrument to safeguard open and fair competition. It also encouraged the Commission and Member States to 'use their bilateral and multilateral relations to actively support the establishment of a level playing field favouring open and fair competition in international air transport' (Recital 24, p. 4).