European Scrutiny Committee Contents


18 Aviation policy

(34271)

14333/12

COM(12) 556

Commission Communication: The EU's external aviation policy — addressing future challenges

Legal base
DepartmentTransport
Basis of considerationMinister's letter of 12 December 2012
Previous Committee ReportHC 86-xviii (2012-13), chapter 9 (31 October 2012)
Discussion in Council20 December 2012
Committee's assessmentPolitically important
Committee's decisionCleared

Background

18.1 International aviation relations between Member States and third countries have traditionally been governed by bilateral air services agreements. However, in 2002 these were found by the European Court of Justice to be contrary to Article 43 EC (now Article 49 TFEU) where they deny market access to carriers owned and controlled by nationals of another Member State. This in practice marked the start of an EU external aviation policy. An important response from the Commission has been to develop an overall policy for civil aviation relations with third countries. In advance of a fully developed policy the Commission was mandated to negotiate a comprehensive air services agreement with the US Government and so-called "horizontal agreements" with all third countries, to bring Member States' bilateral agreements with those countries into line with EU law. Horizontal agreements have been negotiated with a number of third countries, so as to alter such air services agreements with Member States in order to remove discriminatory provisions.

18.2 The last stage in development of an overall policy was the Commission's 2005 Communication "Developing the agenda for the Community's external aviation policy". It proposed moving increasingly from bilateral agreements with third countries towards agreements between the EU and those countries — such agreements would be based on the twin objectives of opening up markets and ensuring fair competition. To this end it suggested taking forward an external aviation policy that would:

  • continue to bring existing air services agreements into compliance with the European Court of Justice ruling;
  • create, by 2010, a common aviation area comprising the EU and southern and eastern neighbours; and
  • secure comprehensive regional agreements, especially with the US, China and Russia.[53]

18.3 In this Communication, presented in September, the Commission:

  • took stock of progress since its 2005 Communication;
  • described an aspiration to conclude EU-level agreements with more countries;
  • proposed development of new and more effective EU instruments to help ensure fair competition; and
  • flagged-up a need to address the ownership and control restrictions still applied by many countries.

Whilst it said that good progress had been made, the Commission recognised that the aviation sector in the EU currently faces low growth and that the fastest growing markets are now outside Europe. This motivated its desire to complete agreements with a wide range of third countries — it estimated that the total economic benefit to the EU would be in the region of €12 billion (£9.41 billion). The Commission said that:

  • it believed that open markets are the best starting point for developing international aviation and that competition should be fair and open;
  • it recognised that unfair competitive practices by some third countries injure EU carriers;
  • to help address this, it intended to develop, in consultation with stakeholders, more effective EU instruments to protect EU interests against unfair practices;
  • this could include replacement of Regulation (EC) No 868/2004 concerning protection for EU carriers against subsidisation and unfair practices by third countries[54] with an instrument that better reflects the realities of today's global aviation sector;
  • one immediate way forward could be to develop, at EU level, standard "fair competition clauses" to be agreed and included in all bilateral air services agreements negotiated by Member States; and
  • it recognised that restrictions on ownership and control of airlines, which are still being applied by many countries, effectively deny airlines access to new sources of capital and investment.

18.4 When we considered this document in October we heard that the Cypriot Presidency hoped to agree conclusions on the Communication at the Transport Council on 20 December. We said that, whilst we recognised the utility of EU activity in relation to aviation agreements with third countries, we noted the Government's possible reservations on subsidiarity and competence grounds. So we asked to have reassurance as to how the proposed Council Conclusions were developing in this regard, before we considered this document further. Meanwhile it remained under scrutiny.[55]

The Minister's letter

18.5 The Minister of State, Department for Transport (Mr Simon Burns), writes now to tell us that draft Council Conclusions regarding the Communication are being prepared by the Aviation Working Group. He says that:

  • the Government has supported the Commission's broad aspiration to further liberalise international air transport;
  • although the draft Conclusions are unlikely to be finalised until shortly before the Transport Council on 20 December, the Government anticipates that the Council will be asked to adopt Conclusions which send a clear message to the rest of the world that the EU is committed to the ongoing liberalisation of international air transport whilst ensuring fair and open competition; and
  • it also anticipates that the Conclusions will set out a clear set of priorities for EU-level engagement — prioritising situations where the EU, acting collectively, is likely to have a stronger negotiating position than individual Member States.

18.6 The Minister continues that:

  • when considering the draft Conclusions, the Government has been mindful of any future legislative proposals which might emerge in the light of the Conclusions eventually adopted;
  • it has sought to ensure that the draft contains no hostages to fortune, which might, for instance, lead to unnecessary regulatory, administrative or cost burdens for industry, and it does not expect that they will do so; and
  • for example, the draft Conclusions are expected to support the Commission's intention to analyse, in consultation with industry and Member States, options for a more effective instrument to safeguard open and fair competition in international air transport — this position would not pre-judge the outcome of such analysis.

18.7 The Minister concludes that, on the basis of these negotiations, the Government therefore expects that it will be content to support the Conclusions at the December Transport Council.

Conclusion

18.8 As the Government appears to no longer have subsidiarity or competence reservations, and having no further questions to ask, we now clear the document from scrutiny.





53   (26436) 7214/05 + ADD 1: see HC 34-i (2005-06), chapter 15 (4 July 2005) and HC 34-xv (2005-06), chapter 13 (18 January 2006). Back

54   (24550) 9340/03: see HC 63-xxviii (2002-03), chapter 10 (2 July 2003). Back

55   See headnote. Back


 
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