The mass resignation of European Commissioners could hardly have been poorer timing for those in Brussels gearing up to tackle major issues in aviation. Brussels had planned to start the year running with initiatives spanning everything from alliances through to Eastern Europe and the environment.
The Competition Directorate (DGIV)had been aiming for a final ruling on the competition safeguards attached to Lufthansa and United Airline's Star Alliance as early as mid-year, with decisions on the transatlantic alliances of KLM and Alitalia, Delta Air Lines, Sabena and Swissair, and KLM and Northwest Airlines expected to follow.
When the the approval conditions are finalised - some "slippage" is likely, admit Commission officials - airlines can expect to be faced with a different demands than those originally laid down by the DGIV last year.
The EC now believes that slot regulation will not by itself prove effective and is giving much greater weight to measures which affect consumers more directly.
"For many of the alliances, slot control is not a major factor," says one well-placed official. "Despite their protests, they took account of slot reductions in advance and it made little difference to them.
The DGIV officials are focusing on three key areas: computer reservation systems; frequent flyer programmes; and relations between alliances and travel agencies.
"At first, the regulators considered these to be somewhat marginal," says one official. "Now, they could become more significant than slot reductions as remedies for anti-competitive alliances - although slot control will remain important".
The Star Alliance, which under the EC's draft ruling issued last year was faced with the relinquishment of 93 slots at Frankfurt airport, could be the first to experience the Commission's change of tack.
The DGIV is still formally investigating the proposed alliance between British Airways and American Airlines, although it has been put on the back-burner after the two companies announced last year that they would restrict the alliance to a loose marketing agreement.
BA and Lufthansa can be sure that this change in approach from the EC does not herald any softening of its line on alliances. "Brussels regulators," says a well-placed source, "can see no genuine sign of real competition between the alliances but we are determined to safeguard consumer interests."
The EC Transport Directorate, meanwhile, has to deal with a wide range of issues in the coming months. There is the long-running dispute over Brussels' bid for a mandate to negotiate open skies agreements for Europe, which remains unresolved. Transport Commissioner Neil Kinnock (now effectively still in place, but as a caretaker) is suing EU member states for having negotiated bilateral agreements with the USA, which in its view, violates the European Single Market. The case has not made progress beyond its presentation in December before the European Court of Justice in Luxembourg and no formal hearings are scheduled.
However, an open skies accord between Brussels and Eastern Europe is progressing more smoothly. "We're on track to finalise the text by mid-1999", says a well-placed official, adding that the accord could be ratified in 2000. The accord covers Latvia, Lithuania, Estonia, Poland, the Czech republic, Hungary, Romania, Slovenia and Bulgaria. Norway and Iceland, which already have access to the European Union through their membership of the European Economic Area (EEA), will also be signatories. It is reliably understood that Cyprus could sign the same treaty at a later date.
Also imminent is a new Green Paper (discussion document) on ways of enhancing the rights and safety of passengers. Topics will include the need for the provision of more information to passengers, the potential for new health protection and possible steps to counter violent behaviour by travellers.
Flight duty time regulation, meanwhile, could be issued as early as the end of April. EC officials expect some airlines to respond bitterly to this new legislation, condemning its requirements as inflexible. One says there will be a straightforward response. "The regulation is technically sound."
While some delays in these EC initiatives are inevitable, reports that some Commissioners, including European Transport boss Neil Kinnock, may get their jobs back, suggest that disruption may not be serious. Even if they are anxious about the uncertainty surrounding the top of their organisation, the mood of officials in Brussels is definitely that of business as usual.
The European Commission's Air Transport Agenda in 1999
Approval of noise regulation.
Green Paper on passenger protection.
White Paper on air transport and the environment.
Regulation on flight duty time.
Approval of Star Alliance.
Agreement on text of open skies agreement for East Europe.
European Court proceedings on bilateral open skies agreements between EC member states and USA.
Source: Airline Business
