No sooner had Brussels given Swissair access to the single European market through its investment in Sabena than the Swiss government played the protectionist card, opening itself and the Commission up to criticism.
The Swiss government was acting within the UK-Swiss air services agreement when it refused to approve British Midland's business tariff for Zurich originating passengers. But the whole affair highlights a missed opportunity by the European Commission to consider the European single market as a whole when it set the conditions for the Swissair-Sabena deal, says Tim Walden, government affairs manager for British Midland.
'We feel the [Commission] could have got a better deal on the Swissair-Sabena negotiation,' he adds. Walden argues that the Sabena deal affects the single market as a whole and that the Commission should, therefore have acted to extract further concessions from the Swiss. Indeed, Walden put this argument to the Commission while it was studying the deal.
But a senior source at the Commission disagrees: 'You must look at the relevant market to see if there is any effect, and the market [in the Swissair-Sabena deal] is not the [European] community'. He adds that the Commission acts in the interests of all member states.
With Swissair clamouring to be included in the third package as well, Walden says the Swiss government could have furthered the carrier's case by showing more inclination to liberalisation. 'The Swiss could have done more to hold out the view towards the European Union by bending a little on new carriers coming in and offering lower fares,' says Walden.
However, the Swiss-EU negotiations are still stuck over the road haulage issue. The Swiss are bound by a referendum to transfer all road haulage to rail by the end of the decade, but the EU wants liberal access for all modes of transport.
A senior source at Swissair says the carrier is looking for 'an evolutionary third package', with a phase-in similar to the three stages the EU carriers underwent.
Moreover, the Swissair official disagrees that the Sabena deal gives Swissair access to the EU. 'This does not give Swissair any extra flights, capacity or frequencies,' he says. The immediate benefits of integrating Sabena into Swissair's CRS system, and the joint maintenance of B747 engines and of Crossair's and Sabena's regional fleets, could have been achieved without Swissair taking the equity stake, the source says.
The benefits of the Sabena deal are more long term and require Swiss access to the single market. 'We hope that when we are part of the third package we could dominate Sabena, possibly buy the majority stake, and then it could really work,' he adds.
Source: Airline Business
