11. 10. 89 Official Journal of the European Communities No C 258/3 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation (EEC) on fares for scheduled air services 
COM(89) 373 final 
(Submitted by the Commission on 8 September 1989) 
(89/C 258/04) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 84 (2) 
thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas it is important to adopt measures with the aim 
of progressively establishing the internal market over a 
period expiring on 31 December 1992 as provided for in 
Article 8a of the Treaty; whereas the internal market 
shall comprise an area without internal frontiers in which 
the free movement of goods, persons, services and 
capital is ensured; 
Whereas Council Directive 87/601/EEC (') made a first 
step towards the liberalization in respect of air fares, 
necessary to achieve the internal market in air transport; 
whereas the Council agreed to take further measures of 
liberalization at the end of a three year initial period; 
Whereas a system of double disapproval of air fares is an 
important element in achieving further liberalization; 
Whereas it is appropriate to establish clear criteria 
according to which the Member States' authorities have 
to evaluate proposed air fares; 
Whereas certain of these criteria should be applied not 
only to fares on routes within the Community but also to 
fares on routes to and from the Community; Whereas it is appropriate to provide for a procedure 
according to which Member States may ask the 
Commission's opinion on the conformity of a proposed 
air fare with the criteria laid down; 
Whereas in case of excessively high or low air fares the 
Commission must be able to suspend the application of 
an air fare; 
Whereas Member States in accordance with the 
provisions of the Treaty may not approve fares which are 
contrary to the competition rules; 
Whereas this Regulation replaces Directive 
87/601/EEC; whereas it is therefore necessary to repeal 
that Directive, 
HAS ADOPTED THIS REGULATION: 
Scope and definitions 
Article 1 
This Regulation shall apply to criteria and procedures to 
be applied with respect to the establishment of scheduled 
air fares charged on routes within the Community and 
between the Community and third countries. 
Article 2 
For the purposes of this Regulation: 
(a) scheduled air fares means the prices to be paid in the 
applicable national currency for the carriage of 
passengers and baggage on scheduled air services 
and the conditions under which those prices apply, 
including remuneration and conditions offered to 
agency and other auxiliary services; 
(b) scheduled air service means a series of flights each 
possessing all the following characteristics: 
(') OJ No L 374, 31. 12. 1987, p. 12. (i) it is performed by aircraft for the transport of 
passengers or passengers and cargo and/or mail 
No C 258/4 Official Journal of the European Communities 11. 10. 89 
for remuneration, in such a manner that on each 
flight seats are available for purchase by 
members of the public (either directly from the 
air carrier or from its authorized agents); 
(ii) it is operated so as to serve traffic between the 
same two or more points, either: 
1. according to a published timetable; or 
2. with flights so regular or frequent that they 
constitute a recognisably systematic series; Criteria 
Article 3 
1. Member States shall approve scheduled air fares of 
Community air carriers if they are reasonably related to 
the long-term fully allocated relevant costs of the 
applicant air carrier, including the need for a satisfactory 
return on capital and for an adequate cost margin to 
ensure a satisfactory technical and safety standard. 
(c) flight means a departure from a specified airport 
towards a specified destination airport; 
(d) air carrier means an air transport enterprise with a 
valid operating licence to operate scheduled air 
services; 
(e) Community air carrier means: 2. In approving air fares pursuant to paragraph 1 
Member States shall consider the needs of consumers 
and the competitive market situation. 
3. The fact that a proposed air fare is lower than that 
offered by another air carrier operating on the route 
concerned shall not be sufficient reason for withholding 
approval. 
(i) an air carrier which has its central administration 
and principal place of business in the 
Community, the majority of whose shares are 
owned by nationals of Member States and/or 
Member States and which is effectively 
controlled by such persons or States, or 
(ii) an air carrier which, although it does not meet 
the definition set out in (i), at the time of 
adoption of this Regulation: 
1. either has its central administration and 
principal place of business in the Community 
and has been providing scheduled or 
non-scheduled air services in the Community 
during the 12 months prior to adoption of 
this Regulation; or 
2. has been providing scheduled air services 
between Member States on the basis of third-
and fourth-freedom traffic rights during the 
12 months prior to adoption of this Regu­
lation. 
The air carriers which meet the above criteria 
are listed in the Annex; 4. Member States shall, in particular, examine in 
detail a proposed air fare which is 20 % higher or lower 
than the corresponding fare in force during the previous 
corresponding season. A Member State may in this 
respect for an air fare within the Community initiate the 
procedure laid down in Article 5. 
5. Without prejudice to Article 5 (1), a Member State 
shall permit a Community air carrier operating a direct 
or indirect scheduled air service within the Community, 
having given due notice to the States concerned, to 
match an air fare already approved between the same 
city pairs. This provision shall not apply to indirect air 
services which exceed the length of the shortest direct 
service by more than 20 %. 
6. Only Community air carriers shall be entitled to 
introduce lower air fares than the existing ones on routes 
within the Community. 
(f) a third-freedom traffic right means the right for an air 
carrier established in one State to put down, in the 
territory of another State, passengers, freight and 
mail taken up in the State in which it is registered; 
a fourth-freedom traffic right means the right for an 
air carrier established in one State to take on, in the 
territory of another State, passengers, freight and 
mail for off-loading in the State in which it is 
registered; 
(g) States concerned mean the States between which a 
scheduled air service is operated; Procedures 
Article 4 
1. Scheduled air fares shall be subject to approval by 
the aeronautical authorities of the State(s) concerned. To 
this end, an air carrier shall submit its proposed air fares 
in the form prescribed by those authorities. 
2. Aeronautical authorities shall not require air 
carriers to submit their fares in respect of routes within 
the Community more than 60 days before they come 
into effect. 
11. 10. 89 Official Journal of the European Communities No C 258/5 
3. A fare for a route within the Community shall be 
considered as approved unless, within 30 days of the 
date of its submission, both authorities have notified in 
writing their disapproval to the applicant air carrier, 
stating their reasons. The authorities shall also inform 
each other. 
4. An air fare for a route within the Community, once 
approved, shall remain in force until it expires or is 
replaced. It may however be prolonged after its original 
date of expiry for a period not exceeding 12 months. 
Article 5 
1. A Member State concerned or an air carrier on the 
same route may request the Commission to give an 
opinion on whether a scheduled air fare conforms with 
paragraph 1 of Article 3. The Commission shall 
forthwith inform the other Member State and the air 
carrier concerned and give them the opportunity to 
submit their observations. 
2. The Commission shall give an opinion within two 
months of having received the request. This period may 
be prolonged to the extent necessary in order to obtain 
sufficient further information from the applicant air 
carrier. During its examination of the request and until 
seven days thereafter the Commission may suspend the 
application of an air fare which is 20 % higher or lower 
than the corresponding fare in force during the previous 
corresponding season. 
General provisions 
Article 6 
At least once a year, the Commission shall consult on 
scheduled air fares and related matters with represen­
tatives of air transport user organizations in the 
Community, for which purpose the Commission shall 
supply appropriate information to the participants. Article 7 
In carrying out the duties assigned to it under this Regu­
lation, the Commission may obtain all necessary infor­
mation from the Member States and air carriers 
concerned. 
Article 8 
1. The Commission shall publish a report on the 
application of this Regulation by 1 October 1992 and 
every second year thereafter. 
2. Member States and the Commission shall cooperate 
in implementing this Regulation, particularly as regards 
collection of information for the report referred to in 
paragraph 1. 
3. Confidential information obtained in application of 
this Regulation shall be covered by professional secrecy. 
Article 9 
Where a Member State has concluded an agreement with 
one or more third countries which contains provisions 
which are incompatible with this Regulation, the 
Member State shall, at the first opportunity, take all 
appropriate steps to eliminate such incompatibilities. 
Until such time as the incompatibilities have been elim­
inated, this Regulation shall not affect the rights and 
obligations vis-d-vis third countries arising from such an 
agreement. 
Article 10 
Directive 87/601/EEC is hereby repealed. 
Artikel 11 
This Regulation shall enter into force on 1 January 1991. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States. 
ANNEX 
Air carriers referred to in Article 2 (e) (ii) 
The following air carriers meet the criteria referred to in Article 2 (e) (ii) as long as they are recognized as 
a national carrier by the Member State which so recognizes them at the time of the adoption of this 
Regulation: 
— Scandinavian Airlines System, 
— Britannia Airways, 
— Monarch Airlines.