The European Commission is drawing up legislation for the aviation sector to match US antitrust laws, as the first stage in expanding the European aviation market to the east nears completion.
Commercial aviation is one of the few industry sectors in which Brussels suffers from 'split competence'. The Commission can apply the European antitrust laws to the internal aviation market but is prohibited from doing so on routes to third countries. This weakness has become glaringly apparent as Brussels struggles to assert its right to investigate the British Airways-American Airlines alliance.
The Commission is currently asserting its right to investigate BA-AA under Article 89, which Trevor Soames of law firm Norton Rose describes as 'a pathetic instrument with no procedures and no teeth.'
A Commission official admits implementation under Article 89 is difficult: 'We have competence in competition but we don't have the implementing legislation for external application of rules.'
The Commission is now drafting legislation in a bid to obtain approval from EU member states, following an unsuccessful attempt in 1989. A lot has changed in aviation since then and the Brussels official believes EU ministers could approve the legislation as early as September. The Commission is unlikely to obtain global competence but there is a feeling that it could be granted on country-by-country basis.
The consequences of the Commission obtaining external competence would be significant. 'It has the potential of changing the whole world of aviation,' says Soames. Brussels gained similar competence in shipping less than three years ago. 'This has had a pretty serious effect,' says another lawyer.
One part of the world in which the Commission is unlikely to need to obtain competence is eastern Europe, with 10 countries in line to join the EU aviation market.
The first phase will be completed in June, when the Commission and the Joint Airworthiness Authority will present their assessments of each country to the EU transport ministers. Officials from the Commission have visited all 10 states - Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia - and assessed each one's aviation sector from a commercial and infrastructural viewpoint. The JAA has carried out the safety audits.
A Commission official says that the EU's policy is to admit the countries as part of a multilateral arrangement, but refuses to say when the first countries might be admitted.
Meanwhile, the EU is holding further access talks with Switzerland. Access to the aviation market is blocked by a road haulage dispute, which as the impasse stands could only be cleared if a fresh referendum in Switzerland agreed to allow freedom of access for all EU road hauliers.
Source: Airline Business
