• Policy

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
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 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.

AACO sees that the consultation was extremely wide-ranging and if the revision of the regulation comes to be along the line of thinking of the extreme options of the questions included in the consultation, then that would create serious implications on 3rd countries’ governments, airports, and airlines operating to and from the EU.

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 EC Consultation on the Revision of Reg. 868/2004, please click 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:

5. 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
6. 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 20 April 2017

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