On 15 March 2018, the European Commission launched a public consultation on Regulation No 1008/2008 of the European Parliament and of the Council on common rules for the operation of air services ("Air Services Regulation").
The consultation forms part of the evaluation of this Regulation, announced in the EU Aviation Strategy adopted by the Commission in December 2015. There will follow an impact assessment to consider possible amendments.
The Air Services Regulation, which applies throughout the EU and EEA, establishes the concept of an EU air carrier, specifying which authority delivers the operating licence and under what conditions. The licence requires a valid air operator certificate certifying the undertaking’s technical capacity to safely provide air services. Furthermore, EU air carriers’ principal place of business (their head office and operational and financial control centre) must be in the EU and be majority owned and effectively controlled by EU Member States and/or their nationals. These notions of control and ownership of EU airlines were clarified in June 2017 in the European Commission's Interpretative Guidelines.
All EU air carriers with a valid operating licence can operate air services on any route within the EU without further authorization. The Regulation also provides for regular monitoring of EU air carriers' financial situation.
The Regulation establishes some exceptions to the freedom to operate. In particular, it allows Member States to impose, under specific conditions, public service obligations ("PSOs") to ensure air services to and from under-served regions. Around 180 PSOs are currently in force in the EU. The conditions of PSO have been clarified in June 2017 by the European Commission in its Interpretative Guidelines.
Furthermore, it allows Member States to regulate the distribution of air traffic between airports, provided certain conditions are met, and it also allows air carriers to set the price of their intra-EU air services, provided they respect price transparency provisions. The Regulation also contains provisions on code-sharing as well as aircraft leasing or with aircrew.
The Regulation that formalizes and consolidates air transport liberalization introduced by European institutions in 1992 shaped today's industry, especially benefiting low-cost airlines, regional airports and EU citizens.
The Commission’s first assessment was based on preliminary information, identifying areas of concern detailed in the Inception Impact Assessment.
The main areas of concern are:
- Undermining competition between EU carriers, and inadequate consumer protection (e.g. inconsistent application of existing rules; unclear definitions of basic terms).
- Hampering innovation in EU air carrier business models and jeopardizing quality jobs.
- Restricting EU carriers' ability to maintain and develop their business in an increasingly global environment.
- Restricting EU consumers' ability to benefit from a truly global air carrier business and stronger competition in the EU internal aviation market.
In order to verify this initial assessment, the Commission launched an in-depth evaluation of the application and effects of the Regulation. The public consultation is therefore designed to support both the evaluation of the current Air Services Regulation and the identification of problems, objectives and possible future options. In this respect, the Commission published an Evaluation Roadmap on 21 November 2016 and an Inception Impact Assessment on 22 February.
The questionnaire is available in all official EU languages and responses can be submitted in any official EU language. See here.
The consultation continues until 7 June 2018.
It is the opportunity to make your voice heard!
Annabelle Lepièce, Partner, annabelle.lepiece@cms-db.com
