NoL374/12 OfficialJournaloftheEuropeanCommunities 31.12.87
II
(Actswhosepublicationisnotobligatory)
COUNCIL
COUNCILDIRECTIVE
of14December1987
onfaresforscheduledairservicesbetweenMemberStates
(87/601/87)
THECOUNCILOFTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity,andinparticularArticles84(2)
and227(2)thereof,
HavingregardtotheproposalfromtheCommission(*),
HavingregardtotheopinionsoftheEuropean
Parliament (2),Whereas,byvirtueofArticle189oftheTreaty,Member
Statesmaychoosethemostappropriatemeansof
implementingtheprovisionsoftheDirective,andin
particularmayapplythecriterialaiddowninArticle3
moreprecisely;
Whereasproceduresshouldbeestablishedforthe
submissionbyaircarriersofproposedairfaresandtheir
expressofautomaticapprovalbytheMemberStates
concerned;whereasaircarriersshouldbefreetopropose
airfaresindividuallyorafterconsultationwithotherair
carriersforthepurpose,inparticular,offixingthetermsof
interliningagreements,giventheimportantbenefitswhich
theyconfer;
Whereasprovisionshouldbemadeforrapidconsultation
betweenMemberStatesinthecaseofanydisagreement
andforproceduresforsettlingsuchdisagreements
regardingapprovaloffaresasarenotresolvedby
consultations ;
Whereasprovisionshouldbemadefortheregular
consultationofconsumergroupsonmattersrelatingtoair
fares;
WhereastheHeadsofStateandGovernment ,attheir
meetinginJune1986,agreedthattheinternalmarketinair
transportshouldbecompletedby1992inpursuanceof
Communityactionsleadingtothestrengtheningofits
economicandsocialcohesion;whereastheprovisionsof
thisDirectiveonfaresareafirststepinthisdirectionand
theCouncilwilltherefore,inordertomeettheobjectiveset
bytheHeadsofStateandGovernment,adoptfurther
measuresofliberalizationinrespectofairfaresattheend
ofathreeyearinitialperiod,HavingregardtotheopinionoftheEconomicandSocial
Committee (3),
Whereasmoreflexibleproceduresforapprovingscheduled
passengerairfaresforairservicesbetweenMemberStates
willgiveaircarriersgreaterscopetodevelopmarketsand
bettermeetconsumerneeds;
Whereasaircarriersshouldbeencouragedtocontroltheir
costs,increaseproductivityandprovideefficientand
attractivelypricedairservices;
Whereascommonrulesshouldbeestablishedlayingdown
criteriafortheapprovalofairfares;
(')OJNoC78,30.3.1982,p.6.
(2)OJNoC322,28.11.1983,p.10andOJNoC345,
21.12.1987.
(3)OJNoC77,21.3.1983,p.26.

31.12.87 OfficialJournaloftheEuropeanCommunities NoL374/13
HASADOPTEDTHISDIRECTIVE :
Scopeanddefinitions
Article1
ThisDirectiveshallapplytocriteriaandprocedurestobe
appliedwithrespecttotheestablishmentofscheduledair
fareschargedonanyroutebetweenanairportinone
MemberStateandanairportinanotherMemberState.
ThisDirectiveshallnotapplytotheoverseasdepartments
referredtoinArticle227(2)oftheTreaty.themajorityofwhosesharesareownedby
nationalsofMemberStatesand/orMemberStates
andwhichiseffectivelycontrolledbysuchpersons
orStates,or
(ii)anaircarrierwhich,althoughitdoesnotmeetthe
definitionsetoutin(i),atthetimeofadoptionof
thisDirective:
A.eitherhasitscentraladministration and
principalplaceofbusinessintheCommunity
andhasbeenprovidingscheduledor
non-scheduled airservicesintheCommunity
duringthe12monthspriortoadoptionofthis
Directive.
B.orhasbeenprovidingscheduledservices
betweenMemberStatesonthebasisofthe
third-andfourth-freedoms oftheairduringthe
12monthspriortoadoptionofthisDirective.
Theenterpriseswhichmeettheabovecriteriaarelisted
inAnnexI;
(g)StatesconcernedmeantheMemberStatesbetween
whichthescheduledairserviceinquestionis
operated;
(h)scheduledairservicemeansaseriesofflightseach
possessingallthefollowingcharacteristics :
(i)itpassesthroughtheairspaceovertheterritoryof
morethanoneMemberState;
(ii)itisperformedbyaircraftforthetransportof
passengersorpassengersandcargoand/ormail
forremuneration ,insuchamannerthatoneach
flightseatsareavailableforpurchasebymembers
ofthepublic(eitherdirectlyfromtheaircarrieror
fromitsauthorizedagents);
(iii)itisoperatedsoastoservetrafficbetweenthe
sametwoormorepoints,either:
(1)accordingtoapublishedtimetable,or
(2)withflightssoregularoffrequentthatthey
constitutearecognisablysystematicseries;
(i)flightmeansadeparturefromaspecifiedairport
towardsaspecifieddestination .Article2
ForthepurposesofthisDirective:
(a)scheduledairfaresmeansthepricestobepaidinthe
applicablenationalcurrencyforthecarriageof
passengersandbaggageonscheduledairservicesand
theconditionsunderwhichthosepricesapply,
includingremuneration andconditionsofferedto
agencyandotherauxiliaryservices;
^b)zoneofflexibilitymeansapricingzoneasreferredtoin
Article5,withinwhichairfaresmeetingtheconditions
inAnnexIIqualifyforautomaticapprovalbythe
aeronautical authoritiesoftheMemberStates.The
limitsofazoneareexpressedaspercentagesofthe
referencefare;
(c)referencefaremeansthenormaleconomyairfare
chargedbyathird-orfourth-freedom aircarrieronthe
routesinquestion;ifmorethanonesuchfareexists,
theaveragelevelshallbetakenunlessotherwise
bilaterallyagreed;wherethereisnonormaleconomy
fare,thelowestfullyflexiblefareshallbetaken;
(d)aircarriermeansanairtransportenterprisewithavalid
operatinglicencetooperatescheduledairservices;
(e)athirdfreedomaircarriermeansanaircarrierhaving
therighttoputdown,intheterritoryofanotherState,
passengers,freightandmailtakenupintheStatein
whichitisregistered;
afourth-freedom aircarriermeansanaircarrierhaving
therighttotakeon,inanotherState,passengers,
freightandmailforoff-loadinginitsStateof
registration ;
afifth-freedomaircarriermeansanaircarrierhaving
therighttoundertakethecommercialairtransportof
passengers,freightandmailbetweentwoStatesother
thanitsStateofregistration;
(f)Communityaircarriermeans:
(i)anaircarrierwhichhasitscentraladministration
andprincipalplaceofbusinessintheCommunity,Criteria
Article3
WithoutprejudicetoArticle5(2),MemberStatesshall
approveairfaresiftheyarereasonablyrelatedtothe
long-termfullyallocatedcostsoftheapplicantaircarrier,
whiletakingintoaccountotherrelevantfactors.Inthis
connection,theyshallconsidertheneedsofconsumers,the

NoL374/14 OfficialJournaloftheEuropeanCommunities 31.12.87
5.Onlythird-andfourth-freedom aircarriersshallbe
permittedtoactaspriceleaders.needforasatisfactoryreturnoncapital,thecompetitive
marketsituation,includingthefaresoftheotherair
carriersoperatingontheroute,andtheneedtoprevent
dumping.However,thefactthataproposedairfareis
lowerthanthatofferedbyanotheraircarrieroperatingon
therouteshallnotbesufficientreasonforwithholding
approval.
Procedures
Article4
1.Airfaresshallbesubjecttoapprovalbythe
aeronautical authoritiesoftheStatesconcerned .Tothis
end,anaircarriershallsubmititsfaresintheforms
prescribedbythoseauthorities .
Thisshallbedoneeither:
(a)individually ,
or
(b)followingconsultations withotheraircarriers,
providedthatsuchconsultations complywiththe
requirementsofregulationsissuedpursuanttoCouncil
Regulation (EEC)No3976/87of14December1987
ontheapplicationofArticle85(3)oftheTreatyto
certaincategoriesofagreementsandconcertedpractices
intheairtransportsector.0)Article5
1.Thereshallbetwozonesofflexibilityonanyscheduled
airserviceasfollows:
—adiscountzonewhichshallextendfrom90%tomore
than65%ofthereferencefare;
—adeep-discount zonewhichshallextendfrom65%to
45%ofthereferencefare.
2.Withinzonesofflexibility,theStatesconcernedshall
permitthird-orfourth-freedom aircarrierstocharge
discountanddeep-discount airfaresoftheirownchoice
subjecttotherespectiveconditionssetoutinAnnexIIand
providedthoseairfareshavebeenfiledwiththeStates
concernedatleast21dayspriortotheproposeddatefor
theirentryintoforce.
3.Ifafarewhichhasbeen,oris,approvedunderthe
bilateralapprovalregimeandwhich,asfarasitsconditions
areconcerned,qualifiesforautomaticapprovalinthe
deep-discount zone,isbelowthefloorofthatzone,there
shallbeadditionalflexibilityastothelevelofthatfare.
Suchadditionalflexibilityshallextendfrom10%below
thebilaterallyapprovedlevelofthatfaretotheceilingof
thedeep-discount zone.
Afarewhichisentitledtoadditionalflexibilityin
accordancewiththisparagraphshallberenewedin
successivefareseasonsattherequestoftheaircarrier
concernedatalevelnotlowerthanthepercentageofthe
referencefareatwhichitstoodattheendoftheprevious
fareseason,anychangeinlevelofthereferencefarebeing
dulytakenintoaccount.Forthepurposeofthisparagraph,
summerandwinterfareseasonsshallbetreated
separately.Aeronauticalauthoritiesshallnotrequireaircarriersto
submittheirfaresforapprovalmorethan60daysbefore
theycomeintoeffect.
2.SubjecttoArticle5,andwithoutprejudicetoArticle6,
faresshallrequireapprovalbyboththeStatesconcerned.If
neitheroftheaeronauticalauthoritieshasexpressed
disapprovalwithin30daysofthedateofsubmissionofa
fare,itshallbeconsideredasapproved.Article6
ThisDirectiveshallnotpreventMemberStatesfrom
concludingarrangements whicharemoreflexiblethanthe
provisionsofArticles4and5orfrommaintainingsuch
arrangements inforce.3.Anairfare,onceapproved,shallremaininforceuntil
itexpiresorisreplaced.Itmayhoweverbeprolongedafter
itsoriginaldateofexpiryforaperiodnotexceeding
12months.
4.AMemberStateshallpermitanaircarrierofanother
MemberStateoperatingadirectorindirectscheduledair
service,ongivingduenotice,tomatchanairfarealready
approvedbetweenthesamecitypairs.Thisprovisionshall
notapplytoindirectserviceswhichexceedthelengthofthe
shortestdirectservicebymorethan20%.Article7
1.WhenaStateconcerned (thefirstState)decides,in
conformitywiththeaboveArticles,nottoapprovea
scheduledairfare,itshallinformtheotherStateconcerned
(thesecondState)inwritingwithin21daysofthefare
beingfiled,statingitsreasons.
(')Seep.9ofthisOfficialJournal.2.IfthesecondStatedisagreeswiththedecisionofthe
firstState,itshallsonotifythefirstStatewithinsevendays

31.12.87OfficialJournaloftheEuropeanCommunities NoL374/15
ofbeinginformed,providingtheinformationonwhichits
decisionisbased,andrequestconsultations .EachState
shallsupplyallrelevantinformationrequestedbythe
other.EitheroftheStatesconcernedmayrequestthatthe
Commissionberepresentedattheconsultations .theDirectiveortheawarddoesnotcomplywith
Communitylawinotherrespects.
Intheabsenceofanydecisionwithinthisperiod,theaward
shallberegardedasconfirmedbytheCommission .An
awardconfirmedbytheCommissionshallbecomebinding
ontheStatesconcerned .
9.Duringtheconsultationandarbitrationprocedure,the
relevantexistingairfaresshallbecontinuedinforceuntil
theprocedurehasexpiredandanynewfarehasentered
intoforce.3.IfthefirstStatehasinsufficientinformationtoreacha
decisiononthefare,itmayrequestthesecondStateto
enterintoconsultationsbeforetheexpiryofthe21-day
periodprescribedinparagraph1.
4.Consultationsshallbecompletedwithin21daysof
beingrequested.Ifdisagreementstillpersistsattheendof
thisperiod,themattershallbeputtoarbitrationatthe
requestofeitheroftheStatesconcerned.ThetwoStates
concernedmayagreetoprolongtheconsultationsorto
proceeddirectlytoarbitrationwithoutconsultations .Generalprovisions
Article8
Atleastonceayear,theCommissionshallconsultonair
faresandrelatedmatterswithrepresentatives of
air-transportuserorganizationsintheCommunity,for
whichpurposetheCommissionshallsupplyappropriate
informationtotheparticipants. 5.Arbitrationshallbecarriedoutbyapanelofthree
arbitratorsunlesstheStatesconcernedagreeonasingle
arbitrator.TheStatesconcernedshalleachnominateone
memberofthepanelandseektoagreeonthethirdmember
(whoshallbeanationalofathirdMemberStateandactas
panelchairman).Alternativelytheymaynominateasingle
arbitrator.Theappointmentofthepanelshallbe
completedwithinsevendays.Apanel'sdecisionsshallbe
reachedbyamajorityofvotes.Article9
1.By1November1989,theCommissionshallpublish
areportontheapplicationofthisDirective,which
shallincludestatisticalinformationonthecasesinwhich
Article7hasbeeninvoked.
2.MemberStatesandtheCommissionshallcooperatein
theapplicationofthisDirective,particularlyasregardsthe
collectionoftheinformationreferredtoinparagraph1.
3.Confidentialinformationobtainedinapplicationof
thisDirectiveshallbecoveredbyprofessionalsecrecy.6.IntheeventoffailurebyeitherStateconcernedto
nominateamemberofthepanelortoagreeonthe
appointmentofathirdmember,theCouncilshallbe
informedforthwithanditsPresidentshallcompletethe
panelwithinthreedays.IntheeventofthePresidency
beingheldbyaMemberStatewhichispartytothedispute,
thePresidentoftheCouncilshallinvitetheGovernmentof
thenextMemberStateduetoholdthepresidencyandnot
partytothedisputetocompletethepanel.
7.Thearbitrationshallbecompletedwithinaperiodof
21daysofcompletionofthepanelornominationofthe
singlearbitrator.TheStatesconcernedmay,however,
agreetoextendthisperiod.TheCommissionshallhavethe
righttoattendasanobserver.Thearbitratorsshallmake
cleartheextenttowhichtheawardisbasedonthecriteria
inArticle3.Article10
WhereaMemberStatehasconcludedanagreementwith
oneormorenon-membercountrieswhichgives
fifth-freedomrightsforaroutebetweenMemberStatesto
anaircarrierofanon-membercountry,andinthisrespect
containsprovisionswhichareincompatiblewiththis
Directive,theMemberStateshall,atthefirstopportunity,
takeal!aPProPriatestepstoeliminatesuch
incompatibilities .Untilsuchtimeastheincompatibilities
havebeeneliminated,thisDirectiveshallnotaffectthe
rightsandobligationsvis-a-visnon-membercountries
arisingfromsuchanagreement.
8.ThearbitrationawardshallbenotifiedimmediatelytotheCommission .
Article11
1.AfterconsultationwiththeCommission,theMember
Statesshalltakethenecessarystepstocomplywiththis
Directiveby31December1987.Withinaperiodof10days,theCommissionshallconfirm
theaward,unlessthearbitratorshavenotrespectedthe
criteriasetoutinArticle3ortheprocedurelaiddownby

31.12.NoL374/16 OfficialJournaloftheEuropeanCommunities
2.MemberStatesshallcommunicate totheCommission
allthelaws,regulationsandadministrative provisions
whichtheyadoptfortheapplicationofthisDirective.Article13
ThisDirectiveisaddressedtotheMemberStates.
DoneatBrussels,14December1987
FortheCouncil
ThePresident
U.ELLEMANN-JENSENArticle12
TheCouncilshalldecideontherevisionofthisDirectiveby
30June1990,onthebasisofaCommissionproposaltobe
submittedby1November1989.
ANNEXI
AirlinesreferredtoinArticle2(f)(ii)
ThefollowingairlinesmeetthecriteriareferredtoinArticle2(f)(ii)aslongastheyarerecognizedasanational
carrierbytheMemberStatewhichsorecognizesthematthetimeoftheadoptionofthisDirective:
—Scandinavian AirlinesSystem,
—BritanniaAirways,
—MonarchAirlines.

31.12.87 OfficialJournaloftheEuropeanCommunities NoL374/17
ANNEXII
Conditionsfordiscountanddeep-discountfares
DISCOUNT ZONE
1.Toqualifyforthediscountzoneallofthefollowingconditionsmustbemet:
(a)roundorcircletrip;
(b)maximumstayofsixmonths;
andeither
(c)minimumstayofnotlessthanSaturdaynightorsixnights
or
(d)ifoff-peak(asdefinedintheAppendix)advancepurchaseofnotfewerthan14days;reservationforthe
entiretrip,ticketingandpaymenttobemadeatthesametime;cancellationorchangeofreservation
onlyavailablepriortodepartureofoutboundtravelandatafeeofatleast20%ofthepriceofthe
ticket.
DEEP-DISCOUNT ZONE
2.Toqualifyforthedeep-discount zone,afaremustmeet:
—eitherconditions1(a),(b)and(c)andoneofthefollowingconditions :
(a)reservationfortheentiretrip,ticketingandpaymenttobemadeatthesametime;cancellationor
changeofreservationonlyavailablepriortodepartureofoutboundtravelandatafeeofatleast
20%ofthepriceoftheticket;
(b)mandatoryadvancepurchaseofnotfewerthan14days;reservationfortheentiretrip,ticketingand
paymenttobemadeatthesametime;cancellationorchangeofreservationonlyavailablepriorto
departureofoutboundtravelandatafeeofatleast20%ofthepriceoftheticket;
(c)purchaseoftheticketonlypermittedonthedaypriortodepartureofoutboundtravel;reservation
tobemadeseparatelyforboththeoutboundandinboundjourneysandonlyinthecountryof
departureonthedaypriortotravelontherespectivejourneys;
(d)passengertobeagednotmorethan25yearsornotlessthan60years;
—or,ifoff-peak(asdefinedintheAppendix),conditions1(a)and(b)togetherwith:
—eithercondition2(b)andoneofthefollowingconditions:
(e)passengertobeagednotmorethan25yearsornotlessthan60years;
(f)fatherand/ormotherwithchildrenagednotmorethan25yearstravellingtogether(minimum
threepersons);
(g)sixormorepersonstravellingtogetherwithcross-referenced tickets;
or
(h)mandatoryadvancepurchaseofnorfewerthan28days;reservationfortheentiretrip,ticketing
andpaymenttobemadeatthesametime;cancellationorchangeofreservationonly
available :
—ifmorethan28daysbeforeoutboundtravel,atafeeofatleast20%ofthepriceofthe
ticket,or
—iffewerthan28daysbeforeoutboundtravel,atafeeofatleast50%ofthepriceofthe
ticket.

OfficialJournaloftheEuropeanCommunities31.12.87NoL374/18
Appendix
Definitionof'off-peak'
Anaircarriermaydesignatecertainflightsas'off-peak'onthebasisofcommercialconsiderations .
Whenanaircarrierwishestousecondition1(d)oranyofconditions2(e)to(h),identificationoftheoff-peak
flightsforeachrouteshallbeagreedbetweentheaeronauticalauthoritiesoftheMemberStatesconcernedon
thebasisoftheproposalmadebythataircarrier.
Oneachroutewherethetotalactivityofthird-andfourth-freedom aircarriersreachesaweeklyaverageof
18returnflights,theaircarrierconcernedshallbeallowedasaminimumtoapplyconditions1(d)or2(e)to
(h)onupto50%ofitstotaldailyflights,providedthattheflightstowhichtheseconditionsmaybeapplied
departbetween10.00and16.00orbetween21.00and06.00.