THE EUROPEAN UNION (EU) is having trouble managing its relations with neighbors near and far. Nowhere is this more obvious than in the case of air services. Partly, this is because the European Commission (EC) does not have the authority to control member states' air-services agreements. Partly, also, the EU does not have an air-services policy against which member states could judge the acceptability of the agreements, which they do reach.
The case of Swissair - the national carrier of a non-EU state - illustrates the EU's problems all too clearly. Switzerland, as a nation, has voted not to be a member of the EU. This is clearly not in the interest of Swissair as an airline, which is not entitled to the current and future benefits of European liberalisation. Understandably, Swissair has devoted considerable energy to minimising the disadvantages of its isolated position outside the European club.
It is a longstanding shareholder in Austrian Airlines (which is inside the club), and is seeking to increase that stake to 25%. It has taken effective control of Sabena, although its shareholding is technically less than 50%. Together with Austrian and Sabena, it has applied for anti-trust immunity for its links with US partner Delta Airlines. Such immunity, if granted, would give Swissair a powerful US/European position, especially for one outside the club.
Through these links, Swissair gains many of the advantages of being "European", but with none of the disadvantages (and there are many) of having to conform to Europe's commercial and social legislation, or to its moves towards an open air-market.
Take the recent row, which has blown up over British Midland's attempts to extend its low-cost business services onto the Zurich-London route. The UK carrier would offer fares at roughly a quarter below those of the two national carriers now on the route, following the formulae already successfully put in place on services to many of the rest of Europe's capitals.
What makes Zurich different, is that, unlike Amsterdam, Brussels, Frankfurt, or Paris, it is not the capital of an EU country and therefore not subject to the EU's liberalisation of air markets. Its relations with other European countries are still in the form of individual bilaterals like any other non-EU country. So, when the Swiss Government refuses permission for British Midland to sell its low-fare tickets to Swiss travelers, the EU's transport commissioner has to admit that there is "...not much we can do".
British Midland will no doubt survive this minor set-back, but the question is whether it should have to live with the setback at all as a matter of principle? If the EU is to make its open-skies club one worth joining, the answer is certainly no.
The potential for even more bizarre anomalies is just around the corner. Imagine if Swissair does manage to pull together, a grand coalition with Sabena, Austrian and Delta, backed up by some form of open-skies deal with the USA. Potentially, that could produce the ludicrous situation where two non-EU carriers, Swissair and Delta, could serve a whole swathe of Europe with greater freedom than that of their EU competitors.
The criticism hardly lies with Switzerland or the USA. Both have made quite clear what they hope to gain in Europe. The USA wants transatlantic open skies. The Swiss have for years wanted to sign an air bilateral with Europe, which brings the country within the region's single air market.
Like any other club, the EU has two choices. It can either, open the doors to new members, hoping to extend the benefits that membership brings, or it can choose to run the club exclusively for the benefit of its existing clientele. What it cannot do is to give anyone who turns up the same benefits as those of its paying members. If it does, it risks a free-for-all, which could see the consenus over liberalisation within European, never robust at the best of times, finally break down into farce.
Source: Flight International
