Position Paper on the Proposal for a Regulation on safeguarding competition in air transport

Key messages

  1. Europeans for Fair Competition (E4FC) welcomes the Proposal for a Regulation on safeguarding competition in air transport published on 7 June by the European Commission.
  2. E4FC is convinced that this proposal lays down a good foundation to address unfair practices from third country airlines, an objective that was not effectively achieved by the Regulation 868/2004.
  3. Nevertheless, E4FC emphasizes that specific provisions, such as those related to investigations on and banning of unfair practices should be improved and timelines shortened significantly.

Introduction

EU connectivity is increasingly being challenged by flights which connect at hubs beyond EU borders, operated by state-subsidized airlines. The aim of the Commission’s Aviation Strategy of December 2015 was allowing EU aviation to tap into new growth markets through external aviation agreements with key countries such as the UAE and Qatar. For this strategy to materialize, it is vital that the inclusion of provisions effectively securing undistorted competition in bilateral air services agreements is guaranteed. Furthermore, there is a need for an EU tool to address distortion of competition and unfair practices from third countries and third country operators.

Recommendations

Ensure adoption of efficient measures: In the absence of an international legal framework and due to inadequate EU legislation, E4FC has long been advocating for an EU tool to address distortion of competition and unfair practices from third countries and third country operators. E4FC welcomes and supports the fact that the Commission’s proposal allows not only the Commission but also EU member states, an association of EU air carriers and, especially, individual airlines and to file a complaint.
Moreover, EU policymakers should ensure that only the European Commission can decide to suspend an ongoing investigation. This would avoid any attempt from third countries to put political pressure on EU Member States in order to suspend the inquiry.

Shorten investigation time to 1 year maximum: Under the proposed Regulation, the Commission would have up to 6 months from the lodging of the complaint to decide on the initiation of an investigation. E4FC can support this period for the assessment on the initiations of an investigation, however E4FC believes that the proposed period of 2 years for the conclusion of the proceedings is by far too long and could harm European Airlines for that given period. E4FC therefore calls upon the EU Member States and the European Parliament to considerably shorten the investigation time to a maximum of 1 year. European carriers are, based on their experience, able to provide evidence of unfair and anticompetitive behavior. Immediate action is necessary, particularly with regard to the United Arab Emirates and the State of Qatar, to ensure a competitive and level playing field for European commercial aviation before it will be too late, given the incredible rate of growth of their state owned, state subsidized airlines. This Regulation should be a priority for EU policymakers. For this reason E4FC advocates for a swift adoption of the Regulation, in order to give EU carriers the necessary tool to efficiently address anti-competitive practices.

Introduce a right for carriers to challenge Commission decisions not to investigate: Under the proposed Regulation, the Commission will assess and decide whether to initiate an investigation or not. E4FC believes that the Regulation should include a right for EU carriers to challenge the Commission’s decision before the General Court of the European Union.

More clarity is needed in relation to redressive measures “against Union interest”: Article 12(2)(b) of the proposed Regulation states that “the Commission shall, by means of implementing acts, terminate the investigation conducted in accordance with Article 4 without adopting redressive measures where: [...] (b) the Commission concludes that adopting redressive measures in accordance with Article 13 would be against Union interest”. E4FC believes that this provision should be further clarified. If redressive measures were to be taken and, as a consequence, this would impair other commercial agreements, would this be considered as adopting redressive measures against Union interests? For instance, if a third-country air carrier intends to buy new planes and, at the same time, the Commission decides to sue that carrier, would that be deemed as against Union interest because the investigation might jeopardize the pending commercial agreement? In E4FC’s view, this provision should be further clarified by EU policymakers in order to ensure that the Regulation cannot be circumvented in cases similar to the one presented above.

Support an EU-based airline industry in a competitive way: It is crucial to have an EU-based airline industry which best serves Europe’s strategic interest, such as consumers, European employment, investment, competitiveness and connectivity. Flights to and from the EU, performed by an EU-based airline will result in at least four times more local employment than the same flight performed by a non- EU airline. It is vital that the EU pursues a policy which strengthens the accessibility of Europe’s secondary and tertiary destinations through European hubs to safeguard connectivity and consumer choice on a longer term, always in a fair competitive environment.

Contact
Website: www.e4fc.eu
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Twitter: @CompetitionEU

About E4FC
Europeans for Fair Competition (E4FC) is a coalition of concerned European airline employees, unions, passengers, airlines, and others who have identified the illegal aviation subsidies from two Middle Eastern nations as a major threat to EU jobs, the larger EU economy, and EU connectivity.

 

For further information please contact:
Annette Groeneveld (President): This email address is being protected from spambots. You need JavaScript enabled to view it. Mobile: +31.651.242527 Dutch, English and Spanish
Xavier Gautier (Vice- President): This email address is being protected from spambots. You need JavaScript enabled to view it. Mobile: +33.787.060342 French, Italian and Spanish
Christoph Drescher (General Secretary): This email address is being protected from spambots. You need JavaScript enabled to view it. Mobile: +49.151.62432127 German and English