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Air service agreements between Member States and third countries

The Commission has adopted a package of measures aimed at creating a legal framework for all bilateral relations between the European Union (EU) and third countries in air transport. This package of measures aims to put an end to the uncertainty that prevails in the air transport sector following the judgment of the Court of Justice of the European Communities (CJEC) which declared the bilateral ('open skies') agreements between the United States and eight Member States to be incompatible with EU law.

ACT

Regulation (EC) No 847/2004 of the European Parliament and of the Council of 29 April 2004, on the negotiation and implementation of air service agreements between Member States and third countries.

SUMMARY

Background

These agreements were concluded by Sweden, Finland, Belgium, Luxembourg, Austria, the Netherlands, Denmark and the United Kingdom after the Second World War. They authorise the United States to withdraw, suspend or limit the traffic rights of air carriers designated by the signatory States.

According to the Court of Justice of the European Communities (CJEC), these agreements infringe EU law in two respects. On the one hand, the presence of nationality clauses infringes the right of European airlines to non-discriminatory market access to routes between all Member States and third countries. On the other hand, only the EU has the authority to sign up to this type of commitment where agreements affect the exercise of EU competence, i.e. involve an area covered by EU legislation.

The Court held that since the United States has the right to refuse a carrier, these agreements therefore constitute an obstacle to the freedom of establishment and freedom to provide services, as the opening of European skies to American companies is not reciprocal for all EU airlines.

The new Regulation

The Regulation, which forms part of the abovementioned proposed package of measures, lays down a set of principles designed to ensure an adequate exchange of information within the EU, so that Member States, in their bilateral relations with third countries in the area of air service, do not risk infringing EU law.

The Court of Justice has confirmed the exclusive competence of the EU to negotiate, sign and conclude such agreements when they deal with matters within its competence. The Court has also confirmed the right of EU air carriers to benefit from the right of establishment within the EU, including their right to non-discriminatory market access to routes between all Member States and third countries (nationality clause).

The EU must revise the elements in existing bilateral agreements that infringe EU law. However, given the large number of bilateral agreements, Member States are authorised to negotiate with third countries to conclude a new agreement or modify an existing one, provided that no EU negotiations have been entered into. Although in this case they must act in accordance with the obligations laid down in this Regulation, to ensure that the agreement is compatible with EU law.

The new Regulation establishes a procedure for notifying and authorising the bilateral negotiations conducted by Member States with a view to ensuring the introduction of standard clauses to make existing agreements compliant with EU law. The Regulation also imposes certain obligations on Member States to ensure that non-discriminatory procedures are established for the consultation of stakeholders and for the distribution of traffic rights during negotiations.

A Member State may enter into negotiations with a third country concerning a new air service agreement or the modification of an existing air service agreement, its Annexes or any other related bilateral or multilateral arrangement, the subject matter of which falls partly within the competence of the EU, provided that any relevant standard clauses, developed jointly between Member States and the Commission, are included in such negotiations and the notification procedure is complied with.

Where a Member State intends to enter into such negotiations it shall notify the Commission of its intentions in writing. If, within 15 working days of receipt of the notification, the Commission concludes that the negotiations are likely to undermine the objectives of EU negotiations underway with the third country and/or lead to an agreement which is incompatible with EU law, it shall inform the Member State accordingly.

A Member State shall not enter into any new arrangement with a third country, which reduces the number of EU air carriers which may be designated to provide services between its territory and that country.

REFERENCES

ActEntry into forceDeadline for transposition in the Member StatesOfficial Journal
Regulation (EC) No 847/200430.5.2004-OJ L 157 of 30.4.2004

RELATED ACTS

Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes [Official Journal L 240 of 24.08.1992].

Last updated: 19.09.2007
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