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21 November 2017

Results of AACO 50th AGM

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Fair Competition

A number of Arab airlines have become globally competitive which is helping in expanding the economic benefits of air transport, creating more jobs, and contributing massively in the national and regional sustainable economic development. This global expansion is providing the customers choices and options for travel which did not exist before. However, the competiveness of those airlines is sometimes being challenged by protectionism in some parts of the world.

EU Regulation 868/2004

A. Consultation

As one of the major pillars that constituted the updated EU external aviation policy which was published in September 2012 and adopted by the EU Council and Parliament, the European Commission issued (in October 2013) a consultation paper preparing for a possible proposal to “better protect EU carriers against unfair practices from non-EU air carriers” through revising or replacing regulation 868/2004.

As a response to the consultation, AACO submitted a position paper to the European Commission in January 2014 after work conducted at the level of AACO’s Aeropolitical Watch Group.
In AACO’s position paper, the following was highlighted:
  • The content and nature of the questions and the suggested answers/options assume that there's injury caused to EU carriers as a result of unfair practices, without any proof of such injury or unfair practices.
    Questions seem to be inclined towards securing the interest of EU carriers.
  • The consultation could be envisioned by some EU carriers as a tool to try and secure unnecessary protectionist treatment via regulation 868/2004.
  • Any new regulation should not intend to introduce restrictions on development of air services between the EU and the world at large.
  • Any new legislation should include definitions that are fair and balanced, and in line with international conventions and standards.
  • Any changes to the regulation need to be studied extensively so as to avoid undermining the sovereignty of a third country hence being deemed extraterritorial under international law.
  • Any investigation under the regulation should be supported by evidence and dealing with complaints should follow legal norms.
  • Any fair competition clause proposed by the Commission needs to be mutually agreed with the partner country and should not be imposed.
  • AACO also expressed concern that the Commission is considering widening the scope of Regulation 868 to cover a wider range of alleged unfair practices e.g. levels of airport charges.

 

To view the official response of AACO to the EC Consultation on the Revision of Reg. 868/2004, please click here.

 

B. EC Proposal for a Regulation on safeguarding competition in air transport, repealing Regulation (EC) No 868/2004


In June 2017, the European Commission published a proposal repealing EU regulation 868/2004 on safeguarding competition in air transport in relations with non-EU countries. 

 

To view the proposal, please click here.

AACO, under the umbrella of the Aeropolitical Watch Group, formulated observations on the proposal and communicated those observations with the European Commission and the European Parliament. 

The proposal is currently under discussion at the European Parliament and the EU Council.  

 

C. AACO 50th AGM Resolution on Competition Issues in the Relations with the European Union

AACO 50th AGM , held in November 2017, adopted a resolution that highlighted the benefits of removing restrictions on air transport and principles that need to be followed in any unilateral regulation related to air transport calling on the EU institutions to take these principles into consideration in their approach towards the revision of regulation 868/2004. The AGM also reasserted that dialogue, consultations, and negotiations are the proper path for relations in air transport., and mandated AACO to continue its advocacy with the EU institutions with regards to the EC proposal for revising regulation 868/2004.

 

The full text of the resolution can be viewed here


Work at ICAO
 
ICAO 39th Assembly that was held in 2016 urged Member States to:
  1. take into consideration that fair competition is an important general principle in the operation of international air transport services;
  2. develop competition laws and policies that apply to air transport, taking into account national sovereignty and to consider ICAO guidance on competition;
  3. encourage cooperation among regional and/or national competition authorities when dealing with matters relating to international air transport, including in the context of approval of alliances and mergers;
  4. incorporate the basic principles of fair and equal opportunity to compete, non-discrimination, transparency, harmonization, compatibility and cooperation set out in the Convention and embodied in ICAO’s policies and guidance in national legislation, rules and regulations, and in air services agreements;

and requested the Council to:

  1. develop tools such as an exchange forum to enhance cooperation, dialogue and exchange of information on fair competition between States with a view to promoting compatible regulatory approaches towards international air transport; and
  2. continue to monitor developments in the area of competition in international air transport and update, as necessary, its policies and guidance on fair competition.

 

 

Last updated on 7 December 2017

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