Select Committee on Transport Written Evidence


Memorandum by the Civil Aviation Authority (EU 15)

EUROPEAN UNION COMPETENCE AND TRANSPORT

INTRODUCTION AND OVERVIEW

  1.  The Committee sought views on European Union competence and transport, with particular reference to the current and future powers of the Commission and the relationship between transport matters and the single European market.

  2.  The CAA has identified five air transport related areas, including EU-US negotiations on aviation agreements, in which it believes the Committee may have a particular interest. This memorandum has been structured to address the key points of the Committee's terms of reference for each of the following areas:

    —  negotiations on air service agreements;

    —  access to the groundhandling market;

    —  regulation of aircraft slots at co-ordinated airports;

    —  the Single European Sky programme; and

    —  the European Aviation Safety Agency.

  3.  In each of these cases, the CAA provides specialist advice to the Department for Transport and, in many cases, participates in international fora with the Department to represent the interests of UK industry and consumers.

  4.  The increasing involvement of the European Union in these aspects of air transport has the potential to deliver important benefits, eg,

    —  further development of a single liberalised market in aviation and related services, both within Europe and between Europe and other major aviation markets, particularly the United States;

    —  reducing flight delays and other inefficiencies which stem from each nation regulating its own airspace, from limited co-ordination of cross-border traffic flows, and from differences in ATC systems and concepts;

    —  raising aviation safety standards across Europe, and the creation of a more level playing-field through the establishment and uniform application of common rules for aviation safety.

  5.  The CAA welcomes these various new EU initiatives, and will do all it can to help them succeed, as the potential benefits are very significant. However, experience of other EU initiatives, both in aviation and other fields, underlines the need for considerable effort, skill and vigilance to be applied to ensure that the potential benefits are realised and undesirable side effects avoided. Also, it is important to be realistic about the length of time it will take for the benefits to be realised, given the difficulty of progressing with so many countries involved.

  6.  In many of these areas, the principle of subsidiarity will be very important. Many of the objectives in the areas discussed below can be achieved only with EU involvement. However, given that the results obtained will also often depend significantly on local operation/implementation, there must be effective consultation to ensure the correct distribution of roles and responsibilities between the Commission and Member States. Full account should be taken of national interests. It is essential, therefore, that the role of the EU is limited to those functions which are best performed at EU level.

EXTENDING COMMISSION COMPETENCE IN BILATERAL AND MULTILATERAL NEGOTIATIONS

Actual and appropriate extent of Community competence—EU-US

  7.  In June 2003, the European Council granted a mandate for the EU to carry out negotiations with the US government on a new EU-US air services agreement to replace the current bilateral agreements between each Member State and the US. These talks are now in progress, with the European Commission fielding a negotiating team that is working through a number of issues with the US negotiators, led in their case by the State Department. The mandate to negotiate with the US is designed to achieve a comprehensive liberalising deal, and Member States cannot now negotiate on a bilateral basis with the US.

  8.  From the CAA perspective, the Commission taking this on represents the best chance of achieving the much needed liberalisation of the aviation market between the two most important markets in global aviation, and if successful, could be the first step in achieving global liberalisation.

Actual and appropriate extent of Community competence—other countries

  9.  The June mandate also extends to allowing the Commission to open up discussions with other countries, or blocs of countries, with a view to amending existing restrictive bilateral agreements and replacing them with a multilateral agreement covering all EU Member States and the relevant third country or countries. This is known as the "horizontal mandate". Whilst considerations about how best to handle these issues in the future are continuing, the dividing line between Community competence and national competence in this area is currently somewhat unclear.

  10.  In brief, the system is supposed to allow Member States in the interim to continue to conduct bilateral negotiations, as long as they try to broker deals based on EU airlines being given rights to fly, rather than national airlines (the so-called "community carrier" provision) and do not pursue policies that are contrary to EU transport policy. The Member State would also need to formally ratify any bilateral agreements with the Commission.

  11.  If the Commission is itself in negotiation with a third country, or bloc of countries as part of its horizontal mandate, then the scope of any bilateral with a Member State would be much restricted.

What powers the Commission needs or wants for the future

  12.  The European Court of Justice ruling that declared it was illegal to discriminate in air services agreements between EU airlines on the grounds of the nationality of their ownership, points, in the long term, to a future where bilateral agreements between Member States and third countries should be replaced by multilateral agreements between the European Union and those third countries.

  13.  For negotiations with the US, this is already happening, as described above. The horizontal mandate provides opportunities for this same approach to be applied in relation to other countries on an ad hoc basis but there is a limit to how far this can be taken forward. The sheer number of existing bilateral agreements between Member States and other countries makes it impractical for the Commission to take on a greater role in actively renegotiating them at the moment. This is why the Member States continue to operate national competence in relation to bilaterals, but not with complete freedom of manoeuvre. The difficulty with this "mixed competence" situation is that in a bilateral situation, neither the Member State nor the third country can be sure that the Commission might not overrule any bilateral agreement reached, particularly if the third country is unwilling to agree to the Community carrier provision and yet still wishes to make amendments to the existing air services agreement. The current position is unstable, and it is likely that there will need to be some resolution in the near future—including the possibility of the Commission seeking sole competence in air services negotiations at some point in time.

  14.  Given that the European Court of Justice ruling has confirmed that traffic rights between an EU country and a third country should be available for any EU carrier, not just national carriers, then the logical position for the long term future would probably be for the Commission to take responsibility at the EU level for negotiations with all third countries. These negotiations would then cover all matters, including traffic rights. But for now at least, this would simply be impractical, and lack of resources in the Commission could lead to an unhelpful stasis where sensible bilateral amendments would not be able to be taken forward. Consequently, there would seem to be some merit in allowing Member States in the interim to preserve the ability to amend their own bilateral agreements, unless the Commission is itself taking forward negotiations with the relevant bilateral partner, which could be compromised by a single Member State amending its own agreements.

Key issues from the UK perspective

  15.  The two key issues for the UK in this area relate to the potential opening up of the UK-US market that could be achieved by a broader EU-US deal, and the possible restrictive impact that the Commission's stance on relations with third countries could have on the UK's ability to conclude beneficial amendments to existing bilateral agreements with those countries.

  16.  The UK's existing Bermuda II agreement with the US is more restrictive than the "Open Skies" agreements that are in place between other EU Member States and the US. In particular, access to Heathrow is restricted to just four airlines (two US and two UK) and a limited number of US cities. Consequently, the introduction of an Open Aviation Area would create new opportunities for carriers to operate services to the US from Heathrow, and would bring benefits to UK consumers as well. Removing US restrictions on foreign ownership as part of such a deal would also open up new opportunities for UK carriers who may wish to start up an airline in the US.

  17.  For negotiations with third countries, it will be important that the interim arrangements are clarified and that they are framed in terms that allow some flexibility for Member States. The UK ought to be able to continue to pursue sensible, liberalising, amendments to the network of air services agreements with its trading partners, as long as this did not reduce the likelihood of the Commission being able to conclude a broader agreement on behalf of the EU as a whole. If the Commission seeks to adopt too restrictive a position on this matter, then resource constraints could lead to a long period of stasis (with air services agreements frozen in their current form), which would not be beneficial to airlines or the travelling public.

ACCESS TO THE GROUNDHANDLING MARKET AT COMMUNITY AIRPORTS

Scope of the EC directive on groundhandling

  18.  The directive (Council directive 96/67/EC) was designed to open up access to the market for the supply of groundhandling services within the EU, with the aim of reducing the operating costs of airlines and improving the quality of service for airport users. It was given effect in UK law by the Airports Groundhandling Regulations 1997 and should now be fully implemented across the EU.

  19.  Under the directive, airports (above a certain size) cannot restrict either self handling (airlines that handle themselves) or third party handling (companies that handle airlines or airlines that handle other airlines) without a determination from the Member State. Details of the thresholds and determinations possible are shown in the table below.

Self handling Third party handling
LandsideNone (any airports) None (any airports)
Airside (baggage, ramp, fuel and oil, and freight and mail handling). Not less than 2 handlers (airports with more than 1 mppa or 50,000 tonnes of freight). Not less than 2 handlers (airports with more than 2 mppa or 75,000 tonnes of freight).


  20.  Any restrictions beyond these have to be agreed by the European Commission and are time limited.

  21.  Additional features:

    —  third party handlers (whether airport, airline or other company) must separate the accounts of their groundhandling activities from their other activities;

    —  airports need to establish an airport users' committee comprising representatives of airport users or organisations representing airport users;

    —  Member States may reserve for the managing body of the airport or another body the management of centralised infrastructures used for groundhandling services;

    —  Member States must ensure that handlers (including self handlers) have access to installations to the extent necessary for them to carry out their activities and that any conditions upon access and any fees must be according to relevant, objective, transparent and non-discriminatory criteria.

Key issues from the UK perspective

  22.  The effects of the directive on UK airports have not been great, partly because the UK groundhandling market was already quite diverse in terms of offering a choice of service providers. Prior to the directive, at Heathrow there were eight airlines which had rights to handle themselves and other airlines (although the rights did not necessarily cover all four terminals), at Gatwick the number of handlers had varied between three and four. BAA did not handle at any of its London airports. At Manchester, a subsidiary of the airport operator (Ringway Handling) had held a monopoly of baggage and ramp handling. However, this had been found to act against the public interest by the Monopolies and Mergers Commission and by the time the directive came into force there was a choice of five handlers. At the next tier of airports (eg Birmingham and Glasgow), the airport operators were looking for opportunities to rid themselves of inefficient in-house handling units and to introduce competition. A number of them ceased their own handling activities at this time.

  23.  Since the directive has come into force, the situation has changed to some extent, so that more specialist groundhandling agents now operate at UK airports. However, the greater effect has been seen elsewhere in Europe where groundhandling was often previously either a monopoly or duopoly between the airport and the national airline. The directive has led to an increase in competition and provided greater choice and flexibility for UK airlines. Charter airlines were particularly strong supporters of the directive.

Relevance to the single market

  24.  The directive has led to greater opportunities for groundhandling companies to operate throughout the Community.

Actual and appropriate extent of Community competence

  25.  The directive allows Member States to limit the opening up of markets to some extent but the Commission's oversight has prevented Member States from retaining all the previous barriers to entry. The directive has not had a great effect within the UK, although some airports have commented that they feel it has given them less control over service quality at their airports and has led to more handlers operating than they would otherwise have allowed. From a CAA perspective, the requirement for separation of accounts seems to impose an unnecessary burden, although it is unclear how widely this provision has been implemented across the Community.

Whether the Commission wants or needs more power

  26.  Amendments to the directive are currently being considered. We are not aware of any which would increase the Commission's powers.

EC REGULATION OF SLOTS AT CO -ORDINATED AIRPORTS

Scope of the regulation

  27.  The regulation on slots (Council Regulation (EEC) No 95/93) requires that Member States have an administrative procedure for dealing with slot allocation and that they set up a co-ordination committee to deal with slot issues at co-ordinated (in effect, this means congested) airports.

  28.  The regulation allows for grandfather rights to continue, but sets out rules governing the allocation of new slots (broadly seeking to favour new entrants) and the usage of slots (broadly providing that slots that are not at least 80% used must be returned to the pool and reallocated). Exchange of slots between airlines, with or without monetary compensation, operates under a "grey market".

  29.  Where public service obligations have been imposed on a domestic route according to Article 4 of Council Regulation (EEC) No 2408/92, a Member State may reserve at a co-ordinated airport the slots required for the envisaged operations on that route. If the reserved slots on the route concerned are not used, these slots shall be made available to any other air carrier interested in operating the route according to the public service obligations.

What powers the Commission wants or needs for the future

  30.  The Commission has shown some desire to increase their regulatory control of slots, for example making proposals to outlaw the limited secondary trading in slots that exists under the so-called grey market. However, the UK and other like-minded States have been successful in resisting this change, and there seems to be some acceptance within the Commission that, in the longer term, a move to a more open system of trading in slots would be desirable. However, the current position is unclear; the Commission has asked a consultancy to carry out a study into the benefits of slot markets, the results of which have not yet been released. This is likely to be an area of discussion in the future. The CAA considers it important that the Commission takes a deregulatory approach.

The key issues from a UK perspective

  31.  The slot question is a particularly important one for the UK, as the problem of congested airports is more acute in the south east of England than anywhere else in Europe. The key issues from a UK perspective fall into two main areas. Firstly, the economic value of slots and the need for flexibility of use of what is a scarce resource, particularly for the main London airports, suggests that a transparent secondary trading market in slots ought to be encouraged. This is the UK policy stance, and was the conclusion of a recent CAA study ("Implementation of Secondary Slot Trading" published in December 2001).

  32.  Second, there is the question of how best to allocate new slots at airports, and to what extent auctions could be used to create an efficient initial slot allocation. More work is needed in considering these issues, but as it stands, the EC regulation could operate to constrain how the UK may wish to allocate slots at extremely congested airports such as Heathrow.

  33.  On the first question, the CAA believes that there should be greater flexibility to allow transparent secondary trading and that the Commission could therefore helpfully reduce regulation of this area. On the second question, there could be a need in the future to see the Commission's regulation evolve so that it facilitates economically efficient methods of allocating new resources that could apply in Member States as required.

SINGLE EUROPEAN SKY (SES)

  34.  Air traffic delays in Europe increased steadily during the last decade as the European air traffic management system struggled to cope with increases in traffic. European airspace is still organised in much the same way as it was in the 1960s, with each country regulating its own airspace with only limited co-ordination, primarily to deal with cross border traffic flows. The resulting fragmentation is unlikely to be the most effective way to provide air traffic management services for Europe. It was against this background that the European Commission's proposals for a Single European Sky (SES) were formulated.

What powers the Commission has/stage reached in implementation

  35.  In December 2003, four regulations relating to the implementation of the Single European Sky were finalised for adoption into Community law. This is expected to occur in Feb 2004, following three years of sensitive political debate. These regulations will extend Community competence to administrative arrangements, airspace, service provision and all aspects of interoperability. The proposals are designed to overcome fragmentation in Europe's ATM system by using the EU's regulatory framework to overcome the lack of legislative or enforcement powers, inherent with Eurocontrol's intergovernmental status. As the EU is now a Member of Eurocontrol, the Community's regulatory framework, together with its evolving SES initiative, will provide for a more integrated airspace solution which enhances safety, increases efficiency and reduces delays. The CAA supports the aims of the SES programme and is committed to ensuring that existing high national safety standards are maintained, whilst at the same time recognising our other international obligations.

  36.  The ramifications of the Single European Sky initiative cannot be fully understood at this early stage in its development, but it is clear that the future structure of air traffic management services in Europe may be very different to the one that exists today. This will have a number of consequences, including on the economic regulation of those services and the extent to which national competence in this area may need to be ceded to a central European body of some kind.

What powers the Commission needs or wants for the future

  37.  The EC has indicated that is seeks to:

    —  Become a Member of ICAO;

    —  Extend the remit of the SES to cover the lower airspace as well as the upper airspace;

    —  Tackle congestion at Europe's airports;

    —  Introduce differential en-route air navigation charges to take account of the environmental impact of aircraft;

    —  Extend the powers of the European Aviation Safety Agency to the ATM sector. The Government's White Paper makes clear the importance of ensuring the separation of regulation from service provision that the European Aviation Safety Agency will require;

    —  Coincident with the emergence of SES, the Commission intends to submit legislative proposals to the European Parliament and Council for the introduction of a common licensing scheme for air traffic controllers.

What powers/duties should be reserved to individual countries

  38.  Since the organisation and use of airspace may impact on military authorities, Member States are most likely to retain ATM mechanisms which are proportionate to their defence and security needs.

  39.  Any reconfiguration of airspace into Functional Airspace Blocks will require specific arrangements to ensure that national interests are not compromised, particularly with regard to the military. Operationally based proposals must be driven by users and service providers, although some encouragement by States, who may be informed by EC data, may facilitate the process.

  40.  Decisions relating to the provision of airport capacity are likely to remain a national responsibility, given the sensitivity of local communities to such developments and the differing ownership of airports.

What are the key issues from a UK point of view

  41.  Ensuring full participation by military authorities in the regulation and management of all SES activities through national arrangements. The Transport Act 2000 and Directions to the CAA provide for this in the UK.

  42.  Issues including sovereignty, certification, uniform enforcement (cross border) of standards and air traffic services system provision will have to be considered to ensure both a level playing field and no reduction in safety standards across Europe. As part of the certification process, the EC has also suggested that all air navigation service providers should be subject to a large number of "common requirements". Whilst most of these requirements would not present any difficulties for NATS, their common application to smaller service providers at all airports (including many small airports) would be unnecessary, cumbersome, disproportionate to the service provided and could reduce competition. The UK has argued to the Commission that a flexible approach is needed, and although their formal response has not yet been delivered, they have indicated that they have sympathy with these arguments. However, whatever emerges as "common requirements" may include some new areas of economic oversight which the CAA would have to implement. Going forward, it will be important to ensure that development of the market is not hampered by excessive regulation.

  43.  Capitalising on the opportunities provided by the creation of Functional Blocks of Airspace to the benefit of the UK.

  44.  Ensuring that the CAA makes preparations for the discharge of its function as a national supervisory body and, if necessary, as a qualified entity.

How do these matters relate to the Single European Market

  45.  The SES initiative allows for limited liberalisation of the ATM sector. The first set of Single European Sky regulations includes a requirement for each air navigation service provider to be certified by the relevant national supervisory authority (the CAA, in the case of the UK). The objective behind this certification process is to enhance service provider mobility across Europe and to facilitate future cross-border service provision, objectives which would help to complete the single market and provide for more efficient operation of air traffic control, objectives which the CAA supports. The CAA also supports the introduction of a common European Air Traffic Controller Licence with full mutual recognition attributes. Within the constraints of the licence validation process, there will be some potential to facilitate the free movement of air traffic control staff between EU Member States. Following sector specific training, this would increase the resource pool available to air traffic service providers.

  46.  Air traffic control has some elements of natural monopoly, and there is likely to be a need for some economic regulation under whatever structure for provision of air traffic control services emerges under Single European Sky.

  47.  The thinking on this issue is at an embryonic stage, and it is unlikely that radical change will occur over the next few years. However, if future provision of air traffic management services moves away from a system based on national boundaries (a change which would enhance efficiency and result in a major benefit of the Single European Sky concept), then a national system of economic regulation, such as the CAA applies to NATS, may no longer be fit for purpose. In such a scenario, there would be a range of options available, but it is likely that some form of centralised body, either within the EC or as an independent regulatory agency set up by the EC, may be needed to carry out economic regulation of air navigation service providers that were operating on a multi-national basis.

The actual and appropriate extent of Community competence

  48.  The most important benefit of the SES initiative is that the role of the State is reserved, largely, to the three functions of safety, equal access to scarce resources for all categories of user and the economic oversight of monopolistic providers. The view of the CAA is that the EU should restrict its activities to the high level regulation of the three functions and encourage autonomous service providers to take responsibility and accountability for ATM service provision rather than this being carried out in the same body that is handling regulation. Similarly, it would be far preferable for Eurocontrol to be restricted to carrying out its core functions of network co-ordination (which can only be done by a trans-national body) rather than being involved in pure service provision or regulatory activity. In this manner, a focused ATM sector can respond more effectively to market signals relating to the cost effective provision of capacity.

The level of detail needed in European regulation

  49.  Three levels are foreseen in the SES initiative:

    —  Essential requirements—mandatory

    —  Implementation rules—mandatory

    —  European standards—voluntary.

  50.  The CAA believes that it is essential that the industry determines the means of compliance to mandatory rules and associated certification criteria. Therefore, all regulation should be objective based, protect the autonomy and innovation capabilities of industry and facilitate competition in the development of products and services. However, the nature and extent of the common requirements and implementation rules is not clear.

Conclusion

  51.  The CAA welcomes the EC's involvement in the ATM sector, although it recognises that there are many constraints and difficulties which lie ahead if concepts such as cross-border service provision are to mature. If Member States or Eurocontrol could solve Europe's ATM performance difficulties, there would be no requirement for the Community to acquire or to exercise competence. Consequently, the challenge for the future is to ensure that Community Regulations focus on achieving key objectives such as safety, efficiency and equal access to scarce resources, and that the level of detail contained in the Regulations is appropriate to this aim. To achieve these objectives, further institutional changes will be necessary such that the ATM sector can operate in a regulated commercial environment within the constraints set by European competition law (Articles 81, 82 and 83). This is unlikely to happen in the near future.

EUROPEAN AVIATION SAFETY AGENCY (EASA)

  52.  Air transport in the Community has been progressively liberalised since 1988 and the market has evolved from one based on bilateral agreements, with virtually no competition, towards a genuine open market based on Treaty principles. Hence, air transport is governed by common rules for licensing, market access, pricing and competition. However, it became clear that a genuine air transport single market also required the establishment and uniform application of common rules for aviation safety and environmental protection. In order to address the shortcomings in the JAA system, a European Aviation Safety Agency (EASA) was formed.

  53.  Regulation (EC) No 1592/2002 established the European Aviation Safety Agency (EASA), which started functioning on 28 September 2003 and which put in place the framework to replace the existing Joint Aviation Authorities (JAA) non-binding arrangements. EASA's establishment is regarded as an important element of the European Union's strategy to maintain and improve the level of aviation safety in Europe. Unlike the JAA, the Agency has a firm legal basis on which to ensure the application and enforcement of common aviation requirements across the Member States. The CAA is supportive of the formation of EASA and recognises the potential benefits of common standards across Europe. The CAA has provided ongoing specialist safety regulatory advice and support to the DfT and the Commission during the establishment of EASA, and is closely monitoring the Agency's development, with the aim of seeking to ensure that:

    —  UK CAA is able to continue to fulfil its safety regulatory obligations;

    —  the current high safety standards established by the UK and JAA Full Member States are not eroded as EASA assumes legal competency for aviation regulation;

    —  the UK civil aviation community and industry are not adversely affected; and

    —  safety regulations are developed transparently and, in future, are applied uniformly across all EU Member States.

  54.  The CAA continues to adapt its procedures in transition to the EASA regulatory system, with the aim of achieving these objectives.

What Powers the Commission has

  55.  Regulation (EC) No 1592/2002 of the European Parliament and of the Council of 15 July 2002 set out common rules in the field of civil aviation and established EASA. The Regulation applies to the design, production, maintenance and operation of aeronautical products, parts and appliances, to the personnel and organisations involved in these activities and to those involved in the operation of aircraft. The Regulation does not generally apply to very small aircraft, those of historic relevance or when aircraft are engaged in military, customs, police or similar services.

The stage reached in implementation

  56.  On 28 September 2003, EASA became responsible for the airworthiness standards for the majority of the civil aircraft registered in the Member States of the EU.

  57.  As a first step, Commission Regulations have been established which pave the way for Community action in respect of:

    —  the airworthiness and environmental certification of aeronautical products (generally aircraft, engines and propellers) and related parts and appliances (generally installed equipment); and

    —  the approval of organisations and personnel engaged in the maintenance of these products, parts and appliances.

  58.  It is still early days for the Agency and there is currently a lack of resources and technical expertise. As a consequence, tasks required under the EASA Regulation have initially been allocated to Central JAA and to National Aviation Authorities (NAAs). Such allocations are in the form of interim arrangements pending the signing of more formal contracts.

What powers the Commission needs or wants for the future

  59.  The EC, assisted by EASA, will propose the necessary legislation to extend its scope to embrace the following domains:

    —  operations and licensing—the date for transfer of responsibility from JAA to EASA for these has not been decided, but is expected to be before 2007; and

    —  the safety oversight of airports and air traffic services operators (Air Navigation Facilities). The Commission has indicated that Air Navigation Facilities will not be considered until a later stage of EASA development, which is unlikely to take place before the end of the decade.

What powers/duties should be reserved to individual countries

  60.  The principle of subsidiarity and proportionality has been applied to the development of the airworthiness regulatory framework and the CAA's view is that a similar pragmatic approach should be adopted for the development of essential requirements and Community Regulations in respect of operations and licensing.

  61.  One area recognised as being appropriate for EASA to act centrally is in respect of major certification activity, specifically the initial certification of products and the certification of significant changes to these products when in service. However, to provide the flexibility necessary to ensure operations are not adversely affected, the certification of other changes by competent NAAs should continue.

  62.  The work of EASA should be clearly limited to those activities where it has full and effective access to the information necessary for it to discharge its responsibility. A major consideration in achieving the Commission's strategy to maintain and improve the level of safety in Europe is the management of the continuing airworthiness of community aircraft. This relies on significant effort at local level, which is essential to achieve effective oversight.

What are the key issues from a UK point of view

  63.  The concept of "common regulation" across Europe is not new and, in the area of aircraft certification, has existed since the 1970s in the form of the JAA. The new and challenging concept is common standards of compliance. There are significant issues related to ensuring common compliance in the 15 EU Member States, which could not be satisfactorily addressed by the JAA, and this problem will be exacerbated with the arrival of the 10 Accession States.

  64.  The UK has one of the most rigorous aviation safety regimes in the world, and the CAA considers that it is essential that we avoid any degradation in the UK's achieved and measured safety performance as a result of the introduction of common rules and standards under EASA, particularly in the context of the enlarged Community. We must also ensure that we continue to meet the UK's ICAO obligations in respect of activities now to be undertaken by EASA.

  65.  EASA has started with a sound basis in using the JAA system but the Implementing Rules necessitate some changes to the CAA's regulatory processes. With regard to compliance finding against common standards, UK safety regulatory policy must be consistent with that of EASA, while at the same time encouraging use of "Best Practice" aviation regulation along the lines of the UK model.

  66.  The Commission's stated objectives to maintain and improve safety will be tested by its need to establish a common airworthiness system that meets the demands and expectations of all EU Member States. Significant change in the approach adopted by some NAA's will need to be made in order to achieve common standards across the 15 EU Member States. The CAA has been a leading example in maintaining and where practicable, improving safety. It will be possible for NAA's to take unilateral action in the short-term where they consider safety standards are not being met. However, there is a risk of potential for conflict where such action places an aircraft on one State's register at a commercial disadvantage compared with those operated on the registers of other States.

  67.  Over the first three and a half years of transition to EASA, the Agency will assume responsibility for certain airworthiness certification activities and rule-making. After transition, there will be a significant number of activities in these areas that the CAA will continue to carry out, either as an NAA or on behalf of EASA. During the transition period, EASA will also require the CAA to undertake activities on its behalf under contract. Consequently, it will be necessary to ensure that the CAA takes the necessary steps to enable a smooth transition to the EASA system and that there is clarity concerning the division of responsibilities between EASA and the CAA, both during and after the transition period.

  68.  The development of EASA has implications for the staffing and funding of the CAA, especially in the area of certification of products. Although, pending clearer definition of the role and manpower plan of the Agency, this effect cannot be quantified with any confidence, it is likely that the evolution of EASA will give rise to issues concerning the funding of the CAA. The CAA is unique in Europe in that it is funded entirely by the industry it regulates, whereas other regulators are funded wholly or partly by their taxpayers. Against this background, the CAA considers important that it maintains the appropriate level of expertise necessary to support its national safety regulatory obligations, the DfT, and the interests of the UK civil aviation community and industry.

How do these matters relate to the Single European Market

  69.  The goal of a single European market puts pressure on EASA to achieve common and equal acceptance of national activities. The current responsibilities are focused initially on the certification of products, parts and appliances. The ability to carry out this work varies significantly across EU Member States and EASA must ensure there is consistency of compliance finding, through the development of well defined standards for required expertise, and effective procedures. These must be tested by means of a robust standardisation system (audit). This will be essential if the current high airworthiness standards presently achieved in the UK are to be maintained.

The actual and appropriate extent of Community competence

  70.  At its start in September, EASA had few staff, none of whom had any appreciable experience of the civil aviation regulatory environment. Recruitment at Director level is now almost complete and further recruitment of some Project Managers and Technical Assistants is underway. There is as yet no information on how the lower levels of the Agency will be structured, or when the posts will be filled.

  71.  In respect of technical expertise, it is also unclear how this will be accommodated within the EASA structure. In the interim, the appointment of a Panel of Technical Experts has been proposed, with members sought from appropriate bodies outside the Agency. The size and terms of reference of this panel, and the qualifications of its expert members, have yet to be defined.

  72.  Consequently, the CAA has been asked to continue with the majority of airworthiness certification activities that it currently undertakes, and in the year ahead, EASA will continue to rely substantially on the resources of all the NAAs.

The level of detail needed in European regulation

  73.  The existing standard of airworthiness achieved in Europe has benefited from a system of detailed certification procedures and guidance material, harmonised with the FAA, through the work of the JAA. This has provided consistent interpretation and application of requirements. Issues have arisen during the early experience of EASA resulting from the limited detail of the Regulations and the minimal guidance provided directly by the Agency, primarily due to its temporary lack of suitably experienced staff.

  74.  Initial experience has shown that there is an inherent reluctance to amend regulation, even where such changes may provide the most effective and efficient means to resolve issues and prevent unnecessary burdens on the Agency, NAAs and industry. The CAA supports an approach that minimises the level of detail in Regulations, with such instruction and guidance being left to other documentation that can be managed with greater flexibility.

  75.  The level of detail in European regulation should, therefore, be such that it ensures that the major principles to be followed are well defined and that there is proper foundation for the generation of the support documentation required to achieve consistency of approach within EASA, as well as by the NAAs.

OVERALL CONCLUSIONS

  76.  The CAA welcomes the involvement of the European Union in the aspects of aviation described above, and considers that they have the potential to deliver very significant benefits. Our key concerns at this time are:

    (i)  that the Commission should continue to make progress on liberalisation of air services, particularly with the US, whilst permitting Member States to take forward sensible amendments to bilateral agreements that are consistent with overarching EU aviation policy;

    (ii)  the Commission moves to allow a more open system of trading in airport slots to operate in Member States as necessary;

    (iii)  ensuring that the Commission's emerging secondary legislation for the Single European Sky remains proportionate to the objective and that the development of the market is not hampered by excessive regulation;

    (iv)  ensuring full participation by military authorities in the regulation and management of all Single European Sky activities, through national arrangements;

    (v)  ensuring common standards of compliance with common safety rules established by EASA; and

    (vi)  ensuring that UK safety standards and safety performance are maintained under the new EASA regime.

January 2004


 
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