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European Commission - Fact Sheet

"Open and Connected Aviation": Questions & Answers

Brussels, 8 June 2017

The European Commission is today delivering on its ambitious Aviation Strategy for Europe by adopting a series of measures to further support open and connected aviation markets in the European Union and beyond.

1. Overview & expected benefits

Why is the Commission proposing new measures?

Aviation plays a crucial role in the EU. It drives economic growth, creates jobs, facilitates trade and allows people to travel. Today European aviation represents 26% of the world market, contributing €510 billion annually to Europe's Gross Domestic Product, and supporting 9.3 million jobs in Europe. With around 918 million passengers travelling by air in the European Union and more than 1.45 billion passengers departing or arriving at EU airports in 2015, aviation makes a vital contribution to the connectivity of the Union and to the daily lives of European citizens.

In December 2015, the Commission adopted the 'Aviation Strategy for Europe' in order to ensure that aviation can continue to drive mobility, growth and job creation in the EU. The present initiatives are delivering on the Strategy.

What is the Commission proposing?

'Open and Connected Aviation' includes four initiatives. Two aim at maintaining EU leadership in international aviation:

  • A legislative proposal for a Regulation on safeguarding competition in air transport;
  • Interpretative guidelines on ownership and control of EU airlines.

Two other proposals are addressing limits to growth in European skies:

  • Interpretative guidelines on public services obligations;
  • Practices facilitating continuity of air traffic management.

They come together with a Communication from the Commission that introduces the initiatives and puts them in their wider context.

I am a citizen: what's in it for me?

Citizens will fully benefit from these initiatives. More clarity on public service obligations will allow people living in isolated regions to be better connected to other regions. Best practices on air traffic management continuity should reduce delays and cancellations of flights. All passengers will also benefit from competitive prices, more flights and will have more choices of routes, notably through facilitated investment in EU airlines and the safeguard of competition in air transport.

I am an airline: what's in it for me?

These initiatives will support the competitiveness of European airlines, including in the global market. They will be able to enhance their viability, in particular through better access to foreign investment. They will also be given a more effective complaint mechanism should they be subject to practices affecting competition when operating outside of Europe. Finally, in the event of air traffic management strikes, the effects on airlines should be reduced, and they should be able to schedule their flights with more visibility.

I am an airport/business/industry in the aviation sector: what's in it for me?

Fostering competition in air transport will increase the number of flights operating in Europe, to the benefit of airports and other related businesses. Improved competitiveness and financial viability of EU airlines will also support employment and growth of involved sectors. Enhanced European connectivity will benefit to the EU's economy at large. Air navigation service providers will be better equipped to avoid strikes and mitigate their impact for the whole EU network.

I work in the aviation industry: what's in it for me?

Workers will fully benefit from these initiatives. The Commission is making proposals to reinforce the competitiveness of European airlines and enhance their viability; this will secure employment in the European aviation industry (airlines, airports etc.). The Commission is encouraging Member States and the air navigation service providers and related social partners to promote a sound, efficient and effective social dialogue in Air Traffic Management. In addition, the Commission is promoting the "Toolbox for Successful Social Dialogue in Air Traffic Management". The purpose of this toolbox is to increase the quality of social dialogue and reduce the risk of conflicts. For all workers in the aviation industry, the Commission proposals mean that the right of strike is protected while the disruptions for non-striking workers and the general public would be minimized.    

2. Key elements of the Commission's proposals

a. Regulation on safeguarding competition in air transport

Why is this initiative needed?

European air connectivity relies on EU airlines (average of 7 million flights per year) and on airlines from third countries (average of 1.3 million flights per year). When flying to or from the EU, all airlines are granted the same rights. EU rules guarantee that third countries airlines are protected from any discriminatory practice that could take place within the EU. This may however not always be the case for EU airlines when operating outside of the EU.

Whereas in many other economic sectors there are international rules which ensure an open and fair competition, this is not the case for air transport services. Therefore EU airlines can be subject to practices affecting competition. This may lead to dominant or even monopolistic position on the market and could lead in the long-term, to less connectivity, fewer choices and higher prices for EU citizens. The Commission is therefore proposing this instrument to ensure that airlines can compete on the basis of equal opportunities and that EU's connectivity can be safeguarded.

How will this instrument function?

The Commission will be able to open an investigation on the basis of a complaint from a Member State, an air carrier or a group of air carriers, or on its own initiative. It could also decide not to open an investigation if the complaint is not substantiated or if adopting measures is against Union interest. To propose any measure the Commission will have to demonstrate that an EU airline has been injured because of an unfair practice originating from a third country. If the situation is proven, it could propose compensatory measures to offset the injury. This tool will not interfere with Member States bilateral agreements and does not put into question their competences.

What are the expected benefits of these rules?

The proposed regulation will have benefits for passengers, the industry and the EU economy at large. By equipping the EU with an applicable instrument that addresses practices affecting competition in international aviation, it will allow all airlines to compete fairly. This should prevent monopolistic situations which would be detrimental to connectivity and air fares for passengers. Overall, it should contribute to reinforcing the Union's influence in the world, making the Union a stronger global actor.

What are the next steps?

Today's proposal takes the form of a legislative Regulation. It will now be examined by the European Parliament and the Council (representing the Member States). Once adopted, it will apply to all EU Member States.

b. Interpretative guidelines on ownership and control of EU airlines

Why is the Commission adopting these interpretative guidelines?

In order to grow, European airlines need access to investment, including foreign investment. EU rules (Regulation 1008/2008) require EU Member States or nationals from EU Member States to own more than 50% of an EU airline and effectively control it. Several major foreign investments have taken place in recent years triggering reviews by EU Member States and by the Commission to ensure that these requirements remain fulfilled. The Aviation Strategy adopted in December 2015 therefore identified the need to bring more legal certainty for investors and airlines alike with respect to these provisions. This will facilitate investment in EU airlines, support European competiveness and benefit to workers and passengers.

What is proposed by the interpretative guidelines?

The guidelines do not amend the current rules which remain unchanged. They provide criteria along which ownership and control shall be assessed while recalling that account should be taken of the specificities of each particular case when conducting the assessment.

As regards ownership, the interpretative guidelines emphasize the need to check the nationality of the final natural persons owning the airline. They also provide guidance on how to assess situations where the EU airline belongs to an intermediate company or when the shares of the EU airline are on the stock exchange market. As regards effective control, the guidelines provide details on the four criteria mainly used by the Commission in its assessment: the corporate governance of the EU airline, the shareholders rights, the financial links and the commercial cooperation of the non-EU investor with the EU airline.

Does the Commission intend to amend the rules on the ownership and control?

The guidelines adopted today do not relax the ownership and control rules. In line with its Better Regulation agenda, the Commission is currently evaluating Regulation 1008/2008, including the provisions on ownership and control of EU carriers. The purpose of this evaluation is to guarantee that EU rules remain relevant and effective in a fast-changing aviation market. No decision has been made yet.

c. Interpretative guidelines on Public Service Obligations

Why is the Commission adopting these interpretative guidelines?

Connectivity is vital for EU regions: a 10% increase of connectivity stimulates the GDP growth rate by 1%. The EU recognises the need to address cases where, on certain routes and due to specific conditions, insufficient demand or market failure prevent to provide enough flights to serve the needs of local communities. In such cases, Public Service Obligations can guarantee that peripheral or development regions are well-connected to the rest of Europe. There are currently 179 routes under Public Service Obligations in 13 Member States[1].

In order not to harm competition, Public Service Obligations in the EU are only allowed under very specific conditions set out in Regulation No 1008/2008. However experience shows that the existing rules are not always implemented in a consistent manner, which may undermine the objective of safeguarding both connectivity and competition on those routes. The Aviation Strategy identified the need to bring transparency, consistency and clarity to EU airlines and Member States authorities as to how the Commission interprets the current rules.

What is proposed by the interpretative guidelines?

The guidelines aim to rationalise the use of the Public Service Obligations and to provide more clarity to national authorities so that they are able to use PSO where justified and authorised. The interpretative guidelines clarify for example the Commission's interpretation of a "thin route" or requirements for using the so-called emergency procedure and the relation of PSO rules to the public procurement directives. The guidelines also clarify the interaction between PSO rules and State aid rules.

Does the Commission intend to amend the rules on the PSOs?

In line with its Better Regulation agenda, the Commission is currently evaluating Regulation 1008/2008, including the provisions on Public Service Obligations. The purpose of this evaluation is to guarantee that EU rules remain relevant and effective in a fast-changing aviation market. No decision has been made yet.

d. Practices favouring Air Traffic Management service continuity

Is the Commission limiting the right to strike?

No. The Commission is not questioning the right to strike, which is a fundamental right of workers. The Commission cannot and will not adopt any measures regulating or limiting the right to strike.

What measures are proposed?

The measures proposed can help Member States to be better equipped when facing such disruptions and maintain the EU's connectivity. The initiative defines an action plan to mitigate the impact of Air Traffic Management strikes, by inviting stakeholders and Member States affected to:

  • Implement practices that are already in place in certain Member States and have successfully mitigated the impacts of such disruptions such as:

o    Improvement of social dialogue,

o    Early notification of strikes by the unions,

o    Individual notification of staff members,

o    Protection of overflights

o    Protection of air traffic peak periods

  • Reinforce operational cooperation between stakeholders and the Network Manager to in the event of Air Traffic Management strikes;
  • Further explore the concept of a more integrated European airspace;
  • Investigate possible improvements in the Single European Sky performance framework.

Why is this initiative needed?

The Aviation Strategy identified the need to improve the continuity of air traffic management in the event of traffic disruptions. Despite improvements through the Single European Sky (SES), traffic disruptions still continue to severely hinder air travel in Europe. Of all the causes of traffic disruption, industrial action is the one that the EU is the least equipped to handle. It has caused the cancellation of 243,660 flightsand affected 27 million passengers from 2005 to 2016. Such disruptions are detrimental to EU's connectivity and impact its economy and passengers.

More information:

Press release: An Open and Connected Europe for Jobs, Growth, Investment and Global Leadership

The Aviation Strategy webpage

 

[1]France has the largest number (40), with some 5.7 million passengers annually, meaning every fifth domestic passenger is travelling on a PSO route. In Ireland the share of PSOs in the domestic traffic is approximately 70%. In practice PSO routes are mostly domestic routes with only seven routes linking airports located in two different Member States. 136 of the current PSO routes are subsidised by the public authorities and the amount of subsidies spent yearly to operate them is estimated – based on the information at the disposal of the Commission – to be at least €300 million.

MEMO/17/1473

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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