European Commission: “Safeguarding fair competition in air transport”

• Ensuring fair competition for EU carriers for the benefit of consumers and workers
• Better mechanism to address alleged unfair commercial practices by non-EU countries

On Tuesday, Transport Committee MEPs backed a new law to set up a more effective complaints-handling mechanism to investigate possible unfair practices by non-EU countries, such as subsidies to non-EU airlines, preferential access to airport services or unfair pricing by non-EU country airlines.

According to the new rules, following a complaint from an EU airline, a group of EU airlines, a member state, or on its own initiative, the European Commission can investigate possible unfair commercial practices. If it finds “injury” or “threat of injury” to an EU airline, it can propose compensatory measures to offset the injury, such as financial duties or operational measures.

The proposal is part of the European Commission’s efforts, outlined in its Aviation Strategy and Open and Connected Aviation package, to ensure that the EU aviation sector remains competitive and that the EU’s connectivity is safeguarded, by finding new market opportunities and removing existing barriers.

Fair competition should primarily be addressed through air transport agreements and the EU should engage in a constructive dialogue with non-EU countries to include fair competition clauses in such agreements, MEPs say.

However, a complementary, effective and dissuasive complaints-handling instrument is needed to ensure connectivity and fair competition, thus preserving jobs in European airlines, they add.

Faster investigations

MEPs clarified that investigations should take no longer than 12 months of the 2?year time limit for proceedings. In cases where there is a risk of immediate and irreversible injury to EU carriers, time of proceedings could be reduced to six months.

“Provisional redressive measures” can be taken when investigations are still ongoing, MEPs added, when there is a threat of irreversible injury to EU airlines and if needed for dissuasive reasons or in the case of complex investigations.

“Union interest”

Redressive measures should not be applied where the EU Commission can clearly conclude that it is not in the “Union interest” to apply such measures, i.e. measures that can adversely impact consumers, air carriers, aviation employees and connectivity, MEPs say.

Quote

Rapporteur Markus Pieper (EPP, DE) :

“The new rules fill a significant gap in our legislation. They provide European airlines with an effective tool to enforce fair competition. Our companies are among the most competitive in the world, but pressure from highly subsidised third country carriers is increasing. Carriers from the Gulf-region, Turkey, China and Russia have strong state connections which can cause market distortions. We have now developed an aviation defence instrument that will protect without being protectionist, and should persuade and deter rather than punish.”

Next steps

Transport MEPs approved the Parliament’s position ahead of the negotiations with the Council with 28 votes in favour, 9 against and 2 abstentions. The negotiations can start as soon as the Council adopts its position.