The European Commission has detailed how it plans to implement its aviation strategy, fleshing out plans for competition regulation, ownership and control, mitigation of air traffic control (ATC) strikes, and public service obligation (PSO) routes.

In 2015, the Commission adopted the “Aviation Strategy for Europe.” Two priorities of this strategy were to maintain international aviation leadership and to tackle barriers to growth.

On June 8, the Commission issued a communication, named the “Open and Connected Aviation” package, detailing four ways it plans to deliver on this strategy.

The four measures comprise:

  • A regulatory proposal aimed at “safeguarding” air transport competition
  • Guidelines on how to interpret the European Union’s (EU’s) airline ownership and control rules
  • Best practices to mitigate the impact of ATC strikes
  • PSO guidelines

“These initiatives will support the competitiveness of European airlines, including in the global market. They will be able to enhance their viability, in particular through better access to foreign investment. They will also be given a more effective complaint mechanism should they be subject to practices affecting competition when operating outside of Europe. Finally, in the event of air traffic management strikes, the effects on airlines should be reduced, and they should be able to schedule their flights with more visibility,” the Commission said.

Unfair competition

Specifically, the Commission is proposing new regulation to address unfair competition. If passed by the European Parliament and Council, the new rules will mean that EU member states, airlines—and the European Commission itself—will be able to lodge a complaint into unfair competition, triggering an investigation.

“Whereas in many other economic sectors there are international rules which ensure an open and fair competition, this is not the case for air transport services. Therefore, EU airlines can be subject to practices affecting competition. This may lead to dominant or even monopolistic position on the market and could lead in the long-term, to less connectivity, fewer choices and higher prices for EU citizens,” the Commission said.

“To propose any measure, the Commission will have to demonstrate that an EU airline has been injured because of an unfair practice originating from a third country. If the situation is proven, it could propose compensatory measures to offset the injury. This tool will not interfere with member states’ bilateral agreements and does not put into question their competences.”

Ownership and control

The Commission is also giving a set of ownership and control guidelines, after recent “major foreign investments” triggered EU member state and EU-level probes. The guidelines aim to help EU airlines can secure the investment they need, by giving clear compliance criteria in areas such as owner nationality, indirect ownership, corporate governance, shareholders rights, financial links and commercial cooperation.

Speaking on a webcast, European transport commissioner Violeta Bulc said the clarification will make EU airline acquisitions and joint ventures smoother, simpler and more transparent, but the existing 49% cap on foreign ownership and control will remain in place. When asked whether there were any plans to change the cap in the future, she replied: “Not at this point. This is the first step towards clarifying the rules and guidance. I don’t envision any changes to this.”

ATC strikes & Single European Sky

The ATC strike best practices are non-binding, but they aim to maintain some connectivity and minimize disruption in the event of industrial action. The Commission is encouraging better communication and cooperation between both sides of the dispute, earlier notification, and protection of overflights and maintenance of peak time flights during a walkout. The Commission is also looking to “further explore” more integrated European airspace through the Single European Sky (SES).

“Despite improvements through the SES, traffic disruptions still continue to severely hinder air travel in Europe. Of all the causes of traffic disruption, industrial action is the one that the EU is the least equipped to handle. It has caused the cancellation of 243,660 flights and affected 27 million passengers from 2005 to 2016. Such disruptions are detrimental to EU’s connectivity and impact its economy and passengers,” the Commission said.

PSO guidelines

Finally, the Commission is adopting a set of PSO guidelines to bring transparency, consistency and clarity to EU airlines and member states’ authorities as to how the Commission interprets the current rules. This will also make it easier for national authorities to address connectivity gaps and help local communities.

“These initiatives aim to safeguard competition and connectivity in aviation, facilitate investments in European airlines, and enhance the efficiency and connectivity of European skies. This will reinforce the competitiveness of European aviation,” the Commission said.

European aviation represents 26% of the world market, contributing €510 billion ($574 billion) annually to the continent’s GDP and supporting 9.3 million jobs. European air connectivity relies on EU airlines, which perform an average of 7 million flights per year, and on airlines from third-world countries (averaging 1.3 million flights per year).

Victoria Moores victoria.moores@penton.com