The European Parliament and Council of Transport Ministers have agreed a common position giving Brussels powers to penalise third country carriers deemed to be benefiting from state subsidies.
The proposals were launched by the European Commission in March 2002 in the wake of the massive government support package given to US carriers and the aid that went to salvage Swissair.
The transport ministers have agreed to the proposals, already passed by Parliament, on two conditions: that it is possible to establish damage to Europe's airline industry; and that it is in the European industry's interest to pursue action. The proposals have raised fears of retaliatory action from Washington if they were ever used against Europe's largest trading partner.
However, Brussels insiders say that the threat to the USA of anti-subsidy measures may well be dropped if and when a common policy on competition is agreed with Washington. The two sides opened up negotiations on a common transatlantic aviation area in October.
The move in Brussels has been welcomed by the Association of European Airlines. 'It is the right signal at the right time,' said secretary general Ulrich Schulte-Strathaus. Brussels insiders note that the level of opposition to the proposals from the USA has weakened as Washington itself has cooled on the idea of further support for airlines.
Source: Airline Business
