EC Unveils Proposal To Strengthen Single Market For Aviation

by Ulrika Lomas, for LawAndTax-News.com, Brussels

20 July 2006

The European Commission on Tuesday adopted a proposal to modernise the Single Market legislation for aviation.

The proposal will ensure a consistent application of EU legislation in all member states, thereby creating equal conditions for all airlines. It imposes transparency in fares announced to passengers, and addresses shortcomings in the legal framework for the Single Aviation market, in order to enhance its efficient working.

“The liberalisation of air transport is a European success story: citizens enjoy more travel opportunities and lower fares than ever before. We want to consolidate this success by removing all restrictions to the free provision of air services and ensuring fair competition between airlines”, explained Jacques Barrot, Vice-President of the European Commission in charge of transport.

He continued:

“Citizens must enjoy the benefits of the Single Market and have the possibility for more choice and quality. They must be able to easily compare fares between airlines."

In order to help passengers compare fares, the proposed regulation imposes a requirement that fares should include all applicable taxes, charges and fees. This measure completes the Unfair Commercial Practices Directive, which requires that information on prices should include taxes as of December 2007.

The proposal also simplifies into one single regulation three existing regulations on operating licences, the rights to provide air services within the EU, and pricing in air transport – the so-called “third aviation package” adopted in 1992. Obsolete measures have been removed and the text clarified.

Other measures contained in the proposed regulation:

• Ensure correct application of the rules everywhere in the EU;
• Streamline the financial conditions that all EU airlines have to fulfil and the monitoring of these by Member States;
• Clarify the criteria for the granting and validity of the licence to operate in the EU; and
• Ease the leasing of aircraft registered in the Union, albeit whilst introducing stricter requirements for the leasing of third country aircraft – especially when leased with crew - to ensure safety standards and minimize adverse social consequences.

The rules applicable to public service obligations have been revised to diminish red tape, and the new rules will avoid excessive recourse by Member States to public service obligations as a pretext for closing certain markets from competition.

The proposal additionally clarifies the framework for relations with third countries, and ensures that traffic rights for non-EU airlines to operate between European cities are being negotiated at European level.

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