9.7.84 Official Journal of the European Communities No C 182/3 
Proposal for a Council Regulation on the application of Article 85 (3) of the Treaty to 
certain categories of agreements and concerted practices in the air transport sector 
COM(84) 72 final 
(Submitted by the Commission to the Council on 20 March 1984) 
(84/C 182/03) 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the Euro­
pean Economic Community, and in particular 
Article 87 thereof, 
Having regard to the proposal from the Commis­
sion, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas Council Regulation (EEC) No ... lays 
down the procedure for the rules on competition 
applying to undertakings in the air transport sector; 
Whereas Article 85 (1) of the Treaty may in accord­
ance with Article 85 (3) be declared inapplicable to 
certain categories of agreements, decisions and con­
certed practices which fulfil the conditions con­
tained in Article 85 (3); 
Whereas the provisions for implementation of 
Article 85 (3) must be adopted by way of Regulation 
pursuant to Article 87; 
Whereas the air transport sector has to date been 
governed by a network of international agreements, 
bilateral agreements between States and bilateral 
and multilateral agreements between airlines; 
whereas the changes required to this international 
regulatory system to ensure the introduction of com­
petition in the air transport sector must be effected 
gradually so as to avoid disruption to the air trans­
port industry; whereas such disruption would 
prejudice the provision of continued and regular 
services to the consumer; whereas the avoidance of 
such disruption benefits the consumer; 
Whereas it is desirable that, in order to bring about 
changes to the system gradually and thus to avoid 
major disruption in the air transport industry, group 
exemptions for certain categories of agreements should be granted; whereas these exemptions 
should be granted for a transitional period only, 
during which airlines can adapt to a competitive 
environment; 
Whereas, in order to achieve these benefits, it is 
desirable that the Commission should be enabled to 
declare by way of Regulation that the provisions of 
Article 85 (1) do not apply to certain categories of 
agreements and concerted practices; 
Whereas it should be laid down under what condi­
tions the Commission, in close and constant liaison 
with the competent authorities of the Member 
States, may exercise such powers after sufficient 
knowledge of the content of such agreements and 
concerted practices has been gained and it becomes 
possible to define categories of them in respect of 
which the conditions of Article 85 (3) may be con­
sidered as being fulfilled; 
Whereas, under Article 5 of Regulation (EEC) 
No ..., the Commission may provide that a Deci­
sion taken pursuant to Article 85 (3) of the Treaty 
shall apply with retroactive effect; whereas it is 
desirable that the Commission be also empowered 
to adopt, by Regulation, provisions to the like 
effect; 
Whereas, since there can be no exemption if the 
conditions set out in Article 85 (3) are not satisfied, 
the Commission must have power to lay down by 
Decision the conditions that must be satisfied by an 
agreement or concerted practice which owing to 
special circumstances has certain effects incom­
patible with Article 85 (3); 
Whereas the implementation of the common trans­
port policy as established by Council Decision ... 
on bilateral agreements, arrangements and memo­
randa of understanding between Member States 
relating to air transport will mean an end to the cap­
acity sharing regime whereby Member States in their 
bilateral agreements provide for a 50/50 sharing of 
the capacity offered on the routes between the two 
States concerned; 
No C 182/4 Official Journal of the European Communities 9.7.84 
Whereas Member States may therefore no longer 
require their airlines to enter into capacity-sharing 
agreements; whereas Member States may no longer 
refuse capacity increases or impose capacity reduc­
tions on the designated airlines of the other Member 
States, unless certain conditions are met; whereas 
the liberalization of this strict capacity-sharing 
regime should be achieved gradually and there 
should therefore be a transitional period during 
which the airlines should be allowed to adjust; 
Whereas agreements between airlines on the capa­
city to be offered on a particular route have certain 
merits in that they help to ensure provision of ser­
vices during the less profitable periods and on the 
less profitable routes; whereas the continued provi­
sion of such services and the coordination of sched­
ules and capacity will contribute to economic pro­
gress and benefit the consumer; whereas such agree­
ments should not contain other restrictions on com­
petition which are ancillary to the agreement on 
capacity and which are therefore not indispensable 
to the achievement of economic progress and con­
sumer benefit; whereas competition is not thereby 
eliminated; 
Whereas certain revenue-pooling agreements lead to 
an improvement in the air transport service pro­
vided by the parties to the agreement in so far as 
they compensate an airline for the disadvantage 
involved in operating services during the less profit­
able periods; 
Whereas the provision of such compensation and 
the consequent equalization of the burden involved 
in providing services during the less profitable 
periods provides an incentive for the airlines to con­
tinue to provide such services; whereas the provi­
sion of such services contributes to economic pro­
gress and provides benefit to the consumer; whereas 
without financial incentive the provision of such 
services would not continue; whereas the limitation 
of pooling to 1 % of revenue means that the compe­
titiveness of the more efficient airline is largely 
unaffected by the decision to pool; competition is 
therefore not eliminated and the incentive toward 
greater efficiency is therefore not affected. 
Whereas, under the abovementioned international 
regulatory system, air fares have to date been 
approved by Member States following submissions 
agreed between the airline companies; whereas the 
same tariffs have been applied by all airlines serving 
a given route; whereas until the present there has not been a significant degree of competition in 
regard to price in the air transport sector, whereas 
Council Directive... on fares for scheduled air 
transport between Member States provides for a 
new procedure for the establishment of air fares 
which represents a substantial step forward in the 
introduction of price competition in the air trans­
port sector; 
Whereas until the present the airlines were required 
to obtain the approval of the government of origin 
and destination for the fares they proposed; whereas 
it was possible therefore for one Member State to 
block innovative and competitive proposals by an 
airline from the other Member State; whereas Direc­
tive ... places serious limits on the possibility of 
blocking such proposals in the future; whereas com­
petition is therefore not eliminated; 
Whereas airlines should be allowed to consult with 
a view to the common preparation of price propos­
als in accordance with Articles 4 to 6 of Direc­
tive ... in view of the variety and complexity of 
these fares and the conditions attached thereto; 
whereas the resulting transparency on air fares ben­
efits the consumer, 
HAS ADOPTED THIS REGULATION: 
Article 1 
This Regulation shall apply to international air 
transport between Community airports. 
Article 2 
1. Without prejudice to the application of Regula­
tion (EEC) No..., and in accordance with 
Article 85 (3) of the Treaty, the Commission may by 
Regulation declare that Article 85 (1) shall not apply 
to certain categories of agreements between under­
takings, decisions of associations of undertakings 
and concerted practices which, in the sector of 
scheduled air transport and, for a given route, have 
as their object any of the following: 
(a) capacity sharing; 
9. 7. 84 Official Journal of 
(b) revenue pooling; 
(c) consultation over tariffs. 
2. The Regulation shall define the categories of 
agreements to which it applies and shall specify in 
particular: 
(a) the restrictions or clauses which may, or may 
not, appear in the agreements, decisions and 
concerted practices; 
(b) the clauses which must be contained in the 
agreements, decisions and concerted practices, 
or the other conditions which must be satisfied. 
3. Paragraphs 1 and 2 shall apply by analogy to 
categories of concerted practices for a given route. 
Article 3 
A Regulation pursuant to Article 2 shall be made for 
a limited period. 
It may be repealed or amended where circumstances 
have changed with respect to any factor which was 
basic to its being made; in such case, a period shall 
be fixed for modification of the agreements and 
concerted practices to which the earlier Regulation 
applies. 
Article 4 
A Regulation pursuant to Article 2 may stipulate 
that it shall apply with retroactive effect to agree­
ments and concerted practices to which, at the date 
of entry into force of that Regulation, a Decision 
issued with retroactive effect in pursuance of 
Article 5 of Regulation (EEC) No ... would have 
applied. 
Article 5 
Before adopting a Regulation, the Commission shall 
publish a draft thereof and invite all persons and 
organizations concerned to submit their comments 
within such time limit, being not less than one 
month, as the Commission shall fix. European Communities No C 182/5 
Article 6 
1. The Commission shall consult the Advisory 
Committee on Restrictive Practices and Dominant 
Positions in the Transport Industry: 
(a) before publishing a draft Regulation; 
(b) before adopting a Regulation. 
2. Article 8 (4) of Regulation (EEC) No ... relat­
ing to consultation with the Advisory Committee 
shall apply, it being understood that joint meetings 
with the Commission shall take place not earlier 
than one month after dispatch of the notice conven­
ing them. 
Article 7 
Where the Commission, either on its own initiative 
or at the request of a Member State or of natural or 
legal persons claiming a legitimate interest, finds 
that in any particular case agreements or concerted 
practices to which a Regulation adopted pursuant to 
Article 2 of this Regulation applies have neverthe­
less certain effects which are incompatible with the 
conditions laid down in Article 85 (3) of the Treaty, 
it may in order to put an end to those effects in 
accordance with Articles 4 and 6 of Regulation 
(EEC) No...: 
— address recommendations to the persons con­
cerned, and 
— in the event of failure to observe such recom­
mendations and depending upon the gravity of 
the effects observed, adopt a Decision that 
either: 
— will prohibit them from carrying out or 
require them to perform specific acts and 
impose fines, or 
— while withdrawing the benefit of the block 
exemption which they were enjoying, will 
grant them an individual exemption in 
accordance with Article 5 of Regulation 
(EEC) No ..., or 
— will withdraw the benefit of the block 
exemption which they were enjoying. 
Article 8 
This Regulation shall enter into force on ... 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States.