1

The EU, „Community carriers‟

and 3rd countries

Air Transport, Air & Space

Law and Regulation

Workshop

Abu Dhabi, 12 – 14 April 2009

2

The EU, „Community carriers‟

and 3rd countries

Dr. Peter van Fenema

Adjunct professor of law

McGill University

Institute of Air & Space Law

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The EU, „Community carriers‟

and 3rd countries

See: Air Transport Portal of the European

Commission:

http://ec.europa.eu/transport/air_portal/index_

en.htm

4

The EU, „Community carriers‟

and 3rd countries

„Third package‟ 1993:

created intra –European „open skies‟ with:

- Free competition

- Multiple designation

- Free pricing

- Free capacity

- Non-discriminatory treatment for……

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The EU, „Community carriers‟

and 3rd countries

…..”Community air carriers”

Present definition:

“..an air carrier with a valid operating licence

granted by a competent licensing authority

in accordance with Chapter II”

(“Air Service Regulation” 1008/2008 of Sept. 2008)

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The EU, „Community carriers‟

and 3rd countries

Chapter II…”operating licence” (OL)

Member State grants OL to airline, provided:

- Principal place of business in that M.State

- Valid AOC (technical licence) from that M. State

- Financially sound & insured

- One or more a/c (owned or leased)

- Main occupation is operating air services

- Majority owned and effectively controlled by (nationals of) M.States

Community carrier

7

The EU, „Community carriers‟

and 3rd countries

majority owned and effectively controlled =

“Member States and/or nationals of Member

States own more than 50 % of the

undertaking and effectively control it,

whether directly or indirectly through one or

more intermediate undertakings, except as

provided for in an agreement with a third

country to which the Community is a party”

N.B. EU – US is such an agreement!

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The EU, „Community carriers‟

and 3rd countries

The ECJ „open skies‟ decision of 5 Nov ‟02

Parties:

- Germany

- Denmark

- Sweden

- Finland

- Belgium

- Luxemburg

- Austria

- U.K. (n.b.)

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The EU, „Community carriers‟

and 3rd countries

The ECJ „open skies‟ decision of 5 Nov ‟02:

Decision:

Community/Commission has exclusive

competence in limited areas only

National O&C clause in „open skies‟ bilateral

violates „freedom of establishment„ (= non-

discrimination) provision of Rome Treaty

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The EU, „Community carriers‟

and 3rd countries

Post – ECJ 2002 Commission initiatives:

2003: Commission requested Council:

a. Full mandate for negotiations with USA

b. Global „horizontal‟ mandate (community clauses!)

c. Regulation on the negotiation and implementation of bilaterals between member States and 3rd countries

5 June 2003: Council agreed to requests a, b & c

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The EU, „Community carriers‟

and 3rd countries

a. EU – US („1st stage‟) Agreement 2008

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The EU, „Community carriers‟

and 3rd countries

EU – US agreement (“1st stage”):

- „Community clause‟

- Multiple designation

- Open skies incl. LHR

- Commitment to 2nd stage negotiations (+sanction!):

“further liberalization of traffic rights” and“additional foreign investment opportunities”

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The EU, „Community carriers‟

and 3rd countries

EU – US agreement: effects

- Community carriers (e.g. AF/KL, BA)

- US carriers (LHR!)

- 3rd countries/carriers

N.B. LHR slots for alliance partners!

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The EU, „Community carriers‟

and 3rd countries

b. global „horizontal‟ mandate

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The EU, „Community carriers‟

and 3rd countries

global „horizontal‟ mandate

Negotiations with 3rd countries on:

- replacement of traditional „national‟ O&C

clauses by Community designation clause;

- provisions on safety, pricing (intra-EU 5th

freedom), taxation of aviation fuel, ground

handling, competition

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The EU, „Community carriers‟

and 3rd countries

Community designation clause in bilaterals

i.s.o. national O & C clause:

Old: you may reject my designated airline if

it is not a national carrier

New: you may reject my designated airline if

it is not a Community carrier

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The EU, „Community carriers‟

and 3rd countries

global „horizontal‟ mandate (cont‟d)

EU Commission negotiations with

- individual 3rd countries (non-EU)

- selected by Commission (in consultation

with member states)

- agreement? all bilaterals concluded by

that 3rd country with all member states

amended & in conformity with EU law

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The EU, „Community carriers‟

and 3rd countries

EU horizontal agreement

See: HA agreement with UAE

- Preamble

- General provisions

- Designation

- Safety

- Taxation of aviation fuel

- Tariffs for carriage within the Community

- Compatibility with competition rules

- Annexes

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The EU, „Community carriers‟

and 3rd countries

Horizontal agreement:

BENEFITS for whom?

Community clause‟ may be accompanied by:

(a) mirror clause

(b) „Free rider‟ clause

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The EU, „Community carriers and

3rd countries

global horizontal mandate (cont‟d)

Result of EU „horizontal‟ negotiations:

December 2008:

38 HA‟s 651 bilaterals

60 indiv. 134 bilaterals

------------------

785 bilaterals (100 3rd countries)

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The EU, „Community carriers‟

and 3rd countries

c. Regulation re bilateral negotiations

between EU members & 3rd countries

“Regulation (EC) No. 847/2004 on the

negotiation and implementation of air

service agreements between Member

States and third countries of 29 April 2004”

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The EU, „Community carriers‟

and 3rd countries

Reg. (EC) No 847/2004 of 29 April 2004:

- reflects division of responsibilities/areas of competence between Community and EU member States

- allows member States to engage in bilateral negotiations as long as they comply with (post-2002) EU law, follow certain guidelines and use standard clauses

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The EU, „Community carriers‟

and 3rd countries

Reg. 847/2004:

- Planned bilateral negotiations?

notify Commission

consult with stakeholders

stakeholders may participate

- Prohibition re restriction of designation

(number of airlines)

- Conclusion of agreement (standard

clauses!)

- Distribution of traffic rights - procedure

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The EU, „Community carriers‟

and 3rd countries

Special issue:

National distribution of traffic rights

Basis:

“Non-discriminatory and transparent

procedure”

“Member States shall inform the Commission

without delay of the procedures that they

shall apply”

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The EU, „Community carriers‟

and 3rd countries

- The Commission‟s objectives &

accomplishments

- The Commission‟s ambitions

ECAA, neighboring and other 3rd countries

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The EU, „Community carriers‟

and 3rd countries

ECAA, neighboring & other 3rd countries:

- ECAA (2004)

- Morocco (2004)

- Russia (March 2006) - Siberian royalties

- Ukraine (Dec 2006)

- Canada (Oct 2007) agreement

- Jordan (Nov 2007)

- Australia + New Zealand (June 2008)

- Lebanon (Oct 2008) Euromed Aviation Project