8 Aviation agreements
| (27453)
8656/06
COM(06)169
| Draft Decision on the signature and provisional application of the air transport agreement between the European Community and its Member States and the United States of America
Draft Decision on the conclusion of the air transport agreement between the European Community and its Member States and the United States of America
|
| Legal base | Articles 80 and 300 EC; consultation; QMV
|
| Department | Transport |
| Basis of consideration | Minister's letter of 14 July 2006
|
| Previous Committee Report | HC 34-xxxi (2005-06), para 4 (14 June 2006)
|
| To be discussed in Council | Possibly October 2006
|
| Committee's assessment | Politically important
|
| Committee's decision | Not cleared; further information requested
|
Background
8.1 Since 1987 a single market for air services in the Community
has been progressively established. Community legislation has
extended the scope of this single market beyond purely economic
matters to embrace the areas of safety, security, air traffic
management, social harmonisation and the environment. The Community
has the competence to conclude air services agreements with third
countries and to require meanwhile revision of bilateral air services
agreements to eliminate provisions discriminatory against other
Member States.
8.2 These draft Decisions would authorise the signature,
provisional application and conclusion of an aviation agreement
between the Community and the Member States on the one hand and
the United States of America on the other. They would be a first-stage
agreement — a step towards the Community's ambition, shared
by the Government, of an open aviation area of the Community and
the US.
8.3 When we considered this document last month we
accepted that a first-stage agreement is all that is likely to
be attainable at the moment. And we noted with approval the caution
with which the Government is considering the agreement, particularly
in relation to value of whatever Final Rule, which would set out
the how the requirement that a US carrier must be under "the
actual control of US citizens" is to be interpreted, emerges
from the US Department of Transportation. But we said that before
considering the document further we should like to hear from the
Government as to its conclusions following issue of the Final
Rule and its consideration of the package with Community partners.
In particular we wanted confirmation that:
- UK airlines will be, if not
better off, at least no worse off than under the present bilateral
arrangements; and
- the agreement is based on truly reciprocal benefits.
Meanwhile the document remained uncleared.
8.4 We also noted the proposed suspension of the
application of the agreement with the US to Gibraltar airport
and we presumed that until the agreement is applied to Gibraltar
airport the existing bilateral arrangements between the UK and
the US would continue in operation for Gibraltar airport.[28]
The Minister's letter
8.5 The Parliamentary Under-Secretary of State, Department
of Transport (Gillian Merron) now confirms that the US Department
of Transportation's Final Rule is unlikely to be published until
late August or early September 2006. She says that the Finnish
Presidency currently intends to bring the matter forward for consideration
at the Transport Council on 12 October 2006.
8.6 The Minister then addresses the specific issues
we raised. First, in relation to whether UK airlines would be
at least no worse off under the proposed agreement than under
the current bilateral arrangements, she tells us that the proposals
would represent a significant deregulation compared to the current
UK-US bilateral arrangements:
- restrictions on the number
of flights that can be operated, and the points they can operate
to and from, including limiting the number of airlines that can
operate between Heathrow and the US to two from each side, would
be removed;
- UK airlines would have the right to operate as
many flights as they wish from anywhere in the Community to anywhere
in the US, as well as securing certain other commercial freedoms;
but
- UK airlines would not be allowed, at least at
this first stage, direct access to the US domestic market (or
vice versa).
8.7 The Minister comments that it is the Government's
view that liberalisation and the removal of bilateral restrictions
is generally in the long-term interests of a healthy and sustainable
UK aviation industry and can bring significant benefits for consumers,
and economic benefits for airports, their regions and the country
as a whole. The agreement currently on the table would offer significant
benefits, but not the further benefits that might flow from access
to the US domestic market. She continues that lifting the current
bilateral restrictions on access to Heathrow would represent perhaps
the most significant deregulatory element — although its
impact would be limited by the very restricted additional capacity
currently available at Heathrow. Some UK airlines, such as bmi,
would certainly welcome the removal of the current restrictions
— on the other hand, it is possible that the two incumbent
UK carriers on the Heathrow-US routes, British Airways and Virgin
Atlantic, would see some decline in their market power as a result
of increased competition. At the same time, they could benefit
from the opportunity to offer more services to an open choice
of destinations.
8.8 As for whether there is true reciprocity of benefits
in the proposed agreement the Minister comments that it is to
some extent be a matter of judgement. Whilst any agreement is
likely to be based on the principle of reciprocity and the exchange
of "mirror" rights between the Community and the US,
any assessment of the balance of benefits is complicated by a
range of elements, including geographical factors, the commercial
aspirations and competitivity of different air carriers, and the
wide range of different interests involved on both sides. She
adds that assessment is further complicated as the agreement would
be concluded at Community level. This means, for example, that
US carriers would obtain certain rights to fly within the Community
(though not within individual Member States) and Community carriers
would obtain the right to fly to the US from anywhere within the
Community.
8.9 The Minister continues that in taking a view
on the final proposition on offer the Government will need to:
- reach a judgement, in conjunction
with Community partners, about the balance of benefits involved;
and
- take account of the extent to which the agreement
seems likely to assist the eventual delivery of the full open
aviation area agreement sought by the Community, the prospects
for securing a better deal now or in the near future, and the
possible consequences and disbenefits of not concluding an agreement.
8.10 Finally, in relation to Gibraltar, the Minister
reminds us that the Government is currently in discussion with
the Governments of Gibraltar and Spain about the possibility of
a new agreement concerning Gibraltar Airport, says that it is
hoped that this might in due course lead to Spain lifting its
block on Community aviation measures applying to Gibraltar and
confirms that in the interim the current bilateral arrangements
between the UK and US would need to remain in force in respect
of Gibraltar.
Conclusion
8.11 We are grateful to the Minister for this
account of the Government's present view of the proposed agreement.
We look forward to hearing of its further assessment, particularly
in the light of the Final Rule, once issued, and of its consultations
with other Member States. Meanwhile we do not clear the document.
8.12 We note the Minister's comments on Gibraltar
and urge a speedy satisfactory outcome.
28 See headnote. Back
|
