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Open Skies: Commission sets out its international air transport policy

The Commission has adopted yesterday a package of measures that will create a legal framework for handling all bilateral relationships between…

The Commission has adopted yesterday a package of measures that will create a legal framework for handling all bilateral relationships between the European Union and the rest of the world in the field of air transport. This package will remove the uncertainty of the international air transport industry since the European Court of Justice found that the Open Skies bilateral agreements between 8 member states and the United States were not in conformity with the EU Treaty. This measures will also allow EU airlines to develop truly Europe-wide and international networks by enabling the Community to remove the national ownership requirements still found in most agreements.



With the structured approach and distribution of tasks we are proposing, we will be able to ensure that 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, Vice-president of the European Commission, responsible for Transport and Energy. 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.



The package adopted is composed of three parts:


  • A Commission declaration calling Member States to respect the principles deriving from the Court`s judgements pending agreement of its new legal proposals that will create a framework for action. In particular, the Commission calls upon Member States, when they have contacts with foreign governments, to work in support of the Community`s overall goals, to exchange information with their partners in the EU and to avoid favouring their national airline over other European air carriers.

  • A Commission proposal for a general negotiating mandate to negotiate Community agreements with third countries to remove discrimination between EU airlines and to cover issues that fall under the Community`s legal competence on which Member States may no longer make commitments to their trading partners. The mandate will be sent to the Council for approval and will allow the EU to act as a single unit to secure its priority objectives. The aim of these Community agreements would be to replace the provisions of existing bilateral that do not conform with the Treaty with common standard clauses. In particular, this means ensuring that traffic rights to and from the Community are no longer reserved to the national flag carriers, but are open more widely to airlines that are owned and controlled by European interests. By taking Community action to resolve these issues, it will also allow Member States to focus on the management of matters falling within their competence – in particular the negotiation of air transport routes and frequencies to and from foreign countries.

  • A proposal for a Regulation that will ensure proper information exchange within the Community and non-discriminatory treatment for all European airlines for matters managed by Member States. In the light of the Court judgements and the development of a co-ordinated European approach, it is now essential that information about bilateral discussions between Member States and foreign countries is passed to other Member States and to the Commission to ensure pursuit of a common line, beneficial to the interests of the EU as a whole. In addition, in implementing the results of any negotiations, it must be ensured that all eligible EU airlines have an equal chance to apply for and take up the traffic rights negotiated by a Member State. The Regulation will ensure that EU airlines have these rights.


Background



In its ruling dated 5th November 2002, the European Court of justice concluded that the current Open skies bilateral agreements signed by 8 different Member States (Austria, Belgium, Denmark, Finland, Germany, Luxembourg, United Kingdom and Sweden) infringed the EU law on two main aspects:



The Court confirmed the principle that Community competence for international relations is established wherever internal EC rules have been agreed and affects companies from third countries. It also considered that the clause on the ownership and control of airlines incorporated in these bilateral agreements (nationality clause) is contrary to the rules on the right of establishment.



In November, the Commission adopted a Communication in which it drew the direct implications of the Court judgements for the EU`s international relations, in particular with the United States. The Communication concluded that a new EU/US agreement should be negotiated to replace the existing bilateral agreements as a matter of urgency. It requested Member States to set in train the denunciation of their bilateral agreements with the US.



However, as the Commission stated last year, the Court`s judgements also have implications for all other bilateral relationships between EU Member States and foreign countries. Almost all of these relationships are based on agreements with the same traits as the eight found to be illegal by the Court. As a result of the judgements, the everyday business of regulating air transport between the EU and the rest of the World has been virtually suspended as Member States and their partners seek clarity on the situation.



The Communication and proposals adopted today will complement the previous Communication by offering a framework for handling all other bilateral relationships between the Community and the rest of the World.



The Way forward



The Commission hopes the Parliament and Council will consider its proposals as a matter of urgency and allow the Community to take action to give European airlines a better commercial environment in which to operate. It is important to move quickly to create a framework within which the Community can move forward to allow air transport relations to develop.



As a matter of priority, the Commission considers that the Council of the European Union should give the final go-ahead to EU-level negotiations with the United States. For its part, the US has indicated that it is open to the idea of negotiations with the Community.

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