# CE2004078EN.01022201.xml

| 27.3.2004 | EN | Official Journal of the European Union | CE 78/222 |
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27.3.2004

EN

Official Journal of the European Union

CE 78/222

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(2004/C 78 E/0226)

WRITTEN QUESTION E-3096/03

by Erik Meijer (GUE/NGL) to the Commission

(20 October 2003)

Subject:   Protection of monopolies and high fares by means of aviation agreements with third countries and attempts by potential competitors to break such monopolies

Subject:

| 1. | Is the Commission aware that, on the basis of a 1996 agreement, the airlines KLM and SLM enjoy a monopoly in the form of a joint venture on the busy scheduled route between Schiphol in the Netherlands and Zanderij in the former Netherlands colony of Suriname? |
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1.

Is the Commission aware that, on the basis of a 1996 agreement, the airlines KLM and SLM enjoy a monopoly in the form of a joint venture on the busy scheduled route between Schiphol in the Netherlands and Zanderij in the former Netherlands colony of Suriname?

| 2. | What view does the Commission take of the fact that much higher fares are charged on this route than on internal French flights to the overseas department of Cayenne (French Guyana), given that this French route can offer no serious competition to KLM and SLM whilst there is no good road link between Cayenne and Suriname? |
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2.

What view does the Commission take of the fact that much higher fares are charged on this route than on internal French flights to the overseas department of Cayenne (French Guyana), given that this French route can offer no serious competition to KLM and SLM whilst there is no good road link between Cayenne and Suriname?

| 3. | Is it normal and permissible for an EU Member State to conclude an aviation agreement with a third country in order to reserve routes for two of its ‘own’ airlines, with abnormally high fares as the result? Is the Commission aware of any other examples of this practice? Do those cases also involve routes to former colonies which are vital to the countries in question in that they provide their inhabitants with a link to their families, universities and the outside world in general? |
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3.

Is it normal and permissible for an EU Member State to conclude an aviation agreement with a third country in order to reserve routes for two of its ‘own’ airlines, with abnormally high fares as the result? Is the Commission aware of any other examples of this practice? Do those cases also involve routes to former colonies which are vital to the countries in question in that they provide their inhabitants with a link to their families, universities and the outside world in general?

| 4. | Is the Commission aware that, as from 1 November 2003, the Netherlands airline Air Holland intends to offer a competing seat-only service between the Netherlands and Suriname, with fares roughly half those charged under the current monopoly, and that, should the Netherlands once again refuse Air Holland a licence, flights would be operated from Belgium, which has a separate aviation agreement with Suriname? |
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4.

Is the Commission aware that, as from 1 November 2003, the Netherlands airline Air Holland intends to offer a competing seat-only service between the Netherlands and Suriname, with fares roughly half those charged under the current monopoly, and that, should the Netherlands once again refuse Air Holland a licence, flights would be operated from Belgium, which has a separate aviation agreement with Suriname?

| 5. | What steps can the Commission take in order to ensure that, in the light of the much lower fares, more passengers can use the services operated via Cayenne, the Caribbean island of Curaçao or Brussels? |
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5.

What steps can the Commission take in order to ensure that, in the light of the much lower fares, more passengers can use the services operated via Cayenne, the Caribbean island of Curaçao or Brussels?

Source: the 7 October 2003 edition of the Netherlands daily newspaper de Volkskrant.

Answer given by Mr Monti on behalf of the Commission

(22 December 2003)

(22 December 2003)

The Commission is aware that air traffic between the Member States and third countries is regulated by bilateral air service agreements concluded between the countries where the airports are located. The Commission is also aware that some of these agreements impose restrictions on the number of air carriers designated to operate the route, on frequencies and also on tariffs. Furthermore, these agreements limit the operation of the concerned routes to air carriers owned or controlled by nationals of the Member State party to the agreement. This ‘nationality clause’ impedes other Community carriers from operating on third country routes from Union airports other than the ones located in the Member State of its ‘nationality’.

On 5 November 2002, the Court of Justice recognised the Commission's competence to negotiate certain aspects covered by these bilateral agreements. It has, among others, declared the ‘nationality clauses’ incompatible with the EC Treaty. Consequently, the Commission has proposed to the Council the adoption of certain measures with a view to providing a sound legal framework for the negotiation and implementation of air services agreements and an appropriate division of responsibilities between the Community and its Member States. These measures were adopted by the Council on 5 June 2003. The Commission has immediately started negotiations aiming at (a) concluding a comprehensive Union air service agreement with the United States; (b) renegotiating the matters covered by the bilateral agreements for which the Community has exclusive competence and (c) securing non-discriminatory market access in international agreements for all Community carriers as required by the EC Treaty. The Commission cannot, however, renegotiate all existing bilateral agreements at once. In its Communication of 19 November 2002 (1) in response to the Court's judgements, the Commission identified a number of key trading partners with which it believes Community negotiations should be opened in the future.

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Apart from the above-mentioned aspects covered by bilateral air services agreements for which the Community competence has been recognised by the Court of Justice, according to Community law as it stands today, other aspects of such agreements remain the competence of the Member States themselves. These other aspects include, among other things, the allocation of traffic rights under a bilateral agreement. Any problem arising from this allocation and related authorisations remain the responsibility of the national authorities.

With regard to the application of competition rules, attention must be drawn to the fact that under Article 10 of the EC Treaty read in combination with Articles 81 and 82 of the EC Treaty, Member States are under an obligation not to require nor encourage the violation of competition rules.

However, it must be noted that the existence of a duopoly in certain routes does not, in itself, amount to a breach of the competition rules. It is mentioned in the question that the fares charged on the Amsterdam-Zanderij routes are much higher than the tariffs applied on similar routes between France and Cayenne. This fact on its own does not mean that there is an abuse of dominant position on the route in question. Indeed, fares tend to be lower on markets open to competition than on restricted markets [markets reserved for one or a few operators].

Finally, it must be noted that under the current regulatory situation, the Commission only enjoys limited powers to enforce the competition rules on air traffic between the Community and third countries. Indeed, the current procedural Regulation excludes from its scope air transport between the Community and third countries. The new procedural Regulation — Regulation (EC) 1/2003 — will not change this situation. Consequently, the Commission adopted a proposal last February 2003 to change this handicap. The proposal has been submitted to the Council and discussions are ongoing.

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(1)  COM(2002) 649 final.

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