Select Committee on European Union Seventeenth Report

Appendix 2 Call for Evidence

Sub-Committee B (Energy, Industry and Transport) of the House of Lords Select Committee on the European Union is undertaking an inquiry into the Future of European Aviation Relations with the United States of America (US) and Other States.

On November 5th the European Court of Justice (ECJ) issued its long-awaited judgments in the so-called "open skies" cases. These concerned two separate legal issues. First, whether it is the Community or individual member states which have competence to negotiate air services agreements with other states. Second, whether existing "nationality" clauses in air services agreements infringe Community law on the right of establishment.

On the competence issue, the Court held that states do have the right to conclude bilateral air services agreements, except when they deal with certain areas such as air fares within the European Union (EU), which are the preserve of the Commission.

On the second issue, the Court held that nationality clauses in the bilaterals with the US, which limit designation to airlines "substantially owned and effectively controlled" by nationals of the two signatory states infringe Article 43 of the EC Treaty on the right of establishment.

In response, the European Commission (EC) has called on EU member states to revoke their aviation agreements with the US and to give it (the Commission) a negotiating mandate to conclude an EU-US air services agreement.

Evidence is invited on the issues raised by the Court's decision and the Commission's response to it.

In particular, the inquiry will be seeking answers to the following questions:

(1)  What action should EU Member States take to ensure that existing Bilateral Air Transport Agreements conform to the ECJ judgments?

(2)  Should the United Kingdom (UK) Government and the other EU Member States be encouraged to give a mandate to the European Commission to negotiate an EU-US air services agreement?

(3)  What practical difficulties would the Commission face in undertaking such a mandate? How could they be overcome?

(4)  Would an EU-US agreement lead to improved air services and wider choice for UK, EU and US travellers?

(5)  What are the longer-term implications of the Court's decision (on nationality clauses) and a possible EU negotiating mandate on the UK's air services agreements with states other than the US?

(6)  Will the relaxation of the nationality rule facilitate airline consolidation in Europe through cross-border acquisitions and mergers? Would such consolidation be in the interest of UK and EU air transport industry?

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