The European Commission is considering new measures to tackle what it sees as unfair competition from non-EU airlines as part of a package of proposals unveiled on Monday (7 November) designed to boost the competitiveness of Europe’s aviation sector.
The Commission also asked national governments to give it a mandate to start talks on air transport agreements with a number of countries including China, Turkey, United Arab Emirates, Kuwait and Qatar.
The talks with the Gulf countries are likely to be fraught with difficulty since some European legacy carriers, notably Lufthansa and Air France KLM, accuse the Gulf airlines of receiving unfair state subsidies and have been pushing the Commission to address this in negotiations for air transport agreements.
Emirates and Etihad reject the allegations.
The Aviation Package presented by Transport Commissioner Violeta Bulc, and Vice-President in Charge of Energy Union, Maros Sefcovic, contains a wide range of measures designed to improve connectivity in the 28-member bloc, tackle airports’ capacity constraints and charges and regulate the use of drones.
“It will keep European companies competitive, through new investment and business opportunities, allowing them to grow in a sustainable manner,” Bulc said in a statement.
EURACTIV has previously reported on the Commission’s legislative plans for the aviation sector.
Europe’s aviation industry, which contributes €110 billion to the EU GDP, has been hit by the rapid expansion of the Gulf carriers and the rise of Asia as a major air traffic hub. Its legacy carriers have also suffered at the hands of European low-cost players such as Ryanair and easyJet.
“Aviation has been a European success story,” Sefcovic said during a press conference, citing cheaper and safer flights within Europe and the increase in new flight connections in recent years.
Sefcovic added that the Commission’s plans for the aviation sector would also give a boost to the EU’s goals to cut CO2 emissions.
The aviation strategy “fits very well with the COP21 agenda,” Sefcovic said.
“The EU must remain the leader in the transition to low carbon society whereas managing at the same time the future increased demand for air travel,” he added.
Business lobby group BusinessEurope said it wanted better implementation of previous packages to ensure coordination and management of European airspace.
“As a comparison, the United States controls the same amount of airspace, with more traffic, at almost half the cost,” it said, adding it wanted to see an international level playing field and better access to growing markets.”
The other countries with which the European Commission wants to negotiate air transport agreements are Saudi Arabia, Bahrain, Oman, Mexico and the Association of Southeast Asian Nations.
Next year, the Commission plans to issue guidelines on the law on ownership and control of EU airlines to give legal certainty to investors and airlines.
It will also “actively” pursue the relaxation of the rules on the basis of reciprocity through bilateral aviation and trade agreements.
While the limit on foreign ownership of EU airlines is clearly capped at 49%, there is less clarity on what constitutes effective control.
Etihad, for example, owns 29% of Germany’s Air Berlin and 49% of Alitalia.
Reuters reported on 5 November that the executive would suggest loosening ownership rules.
The executive will also tackle the issue of airlines employing lower-cost workers overseas to avoid high labour costs in Europe by issuing a guide on the applicable labour law and considering whether legal changes are needed.
Europe’s third-biggest budget airline Norwegian Air has, for instance, circumvented Norway’s labour laws by basing some of its crew and jets in countries such as Spain and Thailand, while Ryanair has come under fire in some countries for using pilots employed through agencies, rather than directly with the carrier.
EU member states were urged to complete the “Single European Sky” project, in process for a decade and which would cut costs and emissions by merging national air corridors.
The European Commission estimates that fragmentation of European airspace costs at least €5 billion a year and up to 50 million tonnes of CO2 emissions.