Last updated: 05:02 PM ET, Mon December 07 2015

European Commission Wants Level Airline Playing Field

Airlines & Airports | Rich Thomaselli | December 07, 2015

European Commission Wants Level Airline Playing Field

Photo courtesy of Thinkstock

The European Commission today released a 108-page report outlining its aviation strategy going forward, including a commitment to level the playing field with Middle East Gulf airlines.

Several European airlines, notably Lufthansa, have joined the big three in the U.S. – American, Delta and United – in echoing that their counterparts in the Gulf have an unfair advantage in receiving alleged government subsidies.

Those subsidies distort the international travel market, the airlines say.

“Amidst allegations of unfair competition and subsidies in the global aviation market, many considered it important that the EU is equipped with an effective instrument to address, if necessary, substantiated concerns about unfair practices in international air transport,” the Commission said in its report. “If the EU does not have such an instrument, it is argued, unfair practices by third country carriers or third countries could have a significant negative impact on the competitiveness of the EU aviation industry.”

In its communication on "The EU External Aviation Policy – Addressing Future Challenges," the commission stated that there is a need to develop a more effective instrument to safeguard fair competition in EU external aviation relations. The council, in its conclusions adopted in December 2012, agreed that Regulation 868/2004 did not adequately address the specific characteristics of the air transport sector and supported the commission's intention to analyze possible options for developing a more effective instrument to safeguard fair competition and its intention.

Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies, said in a statement that it commends the European Commission for putting in place strong safeguards to protect the competitiveness of EU carriers and the aviation industry as a whole.

“The global aviation market is highly competitive and when some governments, such as the United Arab Emirates (UAE) and Qatar, are unfairly propping up their state-owned carriers with enormous subsidies, it distorts the market and harms domestic airlines around the world and their workers,” Zuckman said. “Here in the United States, our aviation industry and the hundreds of thousands of workers who support it cannot afford to wait; it is time for the Obama administration to open talks with the governments of the UAE and Qatar to enforce our Open Skies agreements.”

The EU said it plans to put a number of tracks into place to help level the playing field, including a "fair competition clause," in which member states are systematically encouraged to negotiate bilaterally for inclusion in bilateral air services agreements, and to open and continue a dialogue with the six Gulf Cooperation Council States (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE) with a view to enhancing transparency and safeguarding a level playing field.

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