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COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(90) 63 final 
Brussels, 8 March 1990 
Proposal for a 
COUNCIL REGULATION (EEC) 
on the operation of air cargo services 
(presented by the Commission) 
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Explanatory Memorandum 
In 1982 the Commission published a study on air freight. This study 
showed clearly that strong competition exists for the movement of 
freight inside the Community between air and road. In particular 
air transport seemed to be at a disadvantage because of costs but 
in particular because of delays in the transport chain caused by 
the regulatory environment within which air cargo services have to 
operate. This was in particular the case because each air freight 
operation involves many participants with no one party taking 
responsibility for the whole transport operation. The facilitation 
directives (1) did provide some opportunities to improve the 
situation, but matters are still not satisfactory. Many new 
developments; door to door service, small package delivery service, 
Just in time service, 1, 2, 3, 4 day delivery, the growth in the 
transportation of perishable goods and of livestock have all served 
to underline the need for reform. 
Air cargo services have different requirements from the passenger 
market. Cargo is inanimate and less sensitive to intermediate stops 
or reloading, it has In common, however, that more and more 
emphasis Is placed on speed and quality of service. 
(1) OJ N° L 359 Of 22.12.1983. 
OJ N° L 24 of 27.1.1987. 
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2. The rather complicated chain of transport for traditional air 
freight, I.e. from shippers to freight forwarder to airline to 
freight forwarder to shipper, each being responsible for only part 
of the total movement explains the growth of express air freight 
where one organisation, "the Integrator", takes responsibility for 
the whole movement of freight from door to door and thereby is 
better responding to the demand for more speed and quality of 
service. 
3. Air freight operators have difficulties to react to market 
development because of regulatory restrictions in particular for 
market access. As a consequence their competitive situation has 
deteriorated. This is unfortunate since air freight can make a 
valuable contribution to the overall economic situation of an air 
carr1er. 
4. The air carriers have equally well seen the market potential of 
door to door products In addition to the traditional airport to 
airport service. In their efforts to meet this market demand they 
are hampered by existing regulations in the air transport sector. 
The basis for the exercise of all cargo services Is the operating 
rights which derive from the bilateral air services agreements or 
arrangements. The existing EEC regulations which liberalise the 
intra Community air services (the so-called December 1987 package) 
are limited to air freight in combination with passenger services. 
Air services carrying only cargo and mail are excluded from these 
regulations. 
5. The gradual liberalisation and deregulation of the road transport 
sector has Improved the competitive position of road transport 
versus the transportation of goods by air. Not only on the short 
distance, but also on the medium to long distance the traditional 
air carriers face severe competition from road hauliers and they 
experience a gradual reduction of their market share. 
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6. In order to give air carriers the same marketing opportunities as 
their competitors so that they can compete on equal terms, It will 
be necessary to lift existing limitations on market entry, market 
access and operating flexibility for all air carriers including the 
integrators, that are presently operating in the EC market. 
7. Another condition for creating a level playing field for all 
operators in the air freight market is the liberalisation of the 
rate setting mechanism. Rates are completely free for road 
transport but in view of the specific safety considerations for air 
transport it is proposed to retain certain possibilities for 
intervention. To this end it is suggested that rates should remain 
to be filed with governments, but only for information purposes. 
Only when a government is not convinced that the rate includes a 
sufficient margin to ensure satisfactory techncial and safety 
standards it can ask the Commission to disapprove that cargo rate. 
8. It should be taken into account that air cargo creates a vital link 
between Member States. The close relationship between the 
availability of air cargo capacity and the development of trade 
makes it necessary to take a major step towards a substantial 
liberalisation of air cargo services. 
9. The total amount of cargo that is moved by air within the Community 
is very limited. Only 400 000 tonnes of cargo, representing 0.08% 
of the total movement of cargo in the Community is transported by 
air. Combi aircraft mostly are used for the transportation of 
cargo: 
Intra-EC 
tonnes x 1000 1988 1987 1986 
Combi a/c 314.2 295.4 285.1 
Cargo only a/c 82.2 68.4 72.1 
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Proposal for a 
Council Regulation (EEC) 
on the operation of air cargo services 
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 Decision 87/602/EEC1 only created a first step towards 
the liberalisation of air services for cargo in combination with 
passenger services; 
Whereas Council Directive 87/601/EEC2 is limited to the establishment 
of air fares for the carriage of passengers and baggage on scheduled 
air services; 
1 OJ No L 374, 31.12.1987, p. 19. 
2 0J No L 374, 31.12.1987, p. 12. 
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Whereas this Regulation is without prejudice to the application of 
Articles 85 and 86 of the Treaty; 
Whereas the air cargo industry still encounters national barriers which 
hamper the free movement of goods by air; whereas Increased market 
access will stimulate the development of the Community air transport 
sector and give rise to improved services for users; 
Whereas it is important to encourage the development of express parcel 
services, door-to-door services, Just in time services, etc. within the 
Community, so that Community carriers can fully participate in these 
worldwide developments; 
Whereas some Member States depend heavily on air cargo services for 
their connections with the rest of the Community; whereas the movement 
of air cargo Is an essential element for trade; 
Whereas as a consequence It is necessary to remove the existing 
barriers to market access for air cargo services; 
Whereas common rules concerning the granting of operating licences will 
have to be developed and should be implemented after adoption by the 
Council, not later than the 1st of July 1992; 
Whereas Member States shall apply their national rules concerning 
licensing until these common rules are implemented, provided that these 
national rules should not discriminate between air cargo carriers 
established within the Community, i.e. on the basis of nationality; 
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Whereas Member States should not oppose the operation of fifth freedom 
air services by Community air cargo carriers between the Community and 
a third country when these rights have been obtained in accordance with 
applicable rules and regulations; 
Whereas taking into account airport infrastructure and navigational 
aids it is necessary to include certain limitations concerning the use 
of traffic rights; 
Whereas it is desirable to complement the existing regulations with a 
procedure to establish cargo rates not only on air services carrying 
only cargo and mail but also on air services for cargo In combination 
with passengers; 
Whereas publication of all available cargo rates creates more 
transparency in the market place; 
Whereas air carriers need flexibility in setting cargo rates in 
accordance with their own commercial judgement in order to be better 
able to compete; whereas it is also necessary, however, to ensure that 
cargo rates include a sufficient margin to guarantee satisfactory 
technical and safety standards, 
HAS ADOPTED THIS REGULATION: 
Scope and Definitions 
Article 1 
This Regulation concerns: 
a) access to the market for Community air cargo carriers 
b) criteria and procedures for the establishment of air cargo 
rates on an airport to airport basis. 
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Article 2 
For the purpose of this Regulation: 
a) "Air cargo carrier" means an enterprise with a valid licence to 
operate air cargo services carrying only cargo and mail; 
b) "Community air cargo carrier" means: 
(I) an air cargo 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, 
(I Dan air carrier which, at the first of January 1990, did not 
meet the definition set out in (I) but: 
(1) either has Its central administration and principal place 
of business in the Community and has been providing 
scheduled or non-scheduled air cargo services In the 
Community during the 12 months prior to adoption of this 
Régulât ion, 
(2) or has been providing scheduled or non-scheduled air cargo 
services between Member States on the basis of third and 
fourth freedom traffic rights during the 12 months prior to 
adoption of this Regulation; 
c) "cargo rates" mean the prices to be paid for the carriage of cargo 
and mail and the conditions under which these rates apply, 
including remuneration and conditions offered to agency and other 
aux 11iary services. 
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d) "air cargo service" means scheduled or non-scheduled air services 
carrying only cargo and mail; 
e) "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, cargo and mall 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, cargo and mail, for off-loading in the State in 
which it is registered; 
"a fifth-freedom traffic right" means the right for an air carrier 
to undertake the commercial air transport of passengers, cargo and 
mail, between two States other than the State In which it is 
registered; 
"cabotage" means the right for an air carrier to undertake the 
commercial air transport of passengers, cargo and mail between two 
points within a Member State other than the State In which It Is 
registered; 
f) "airport system" means two or more airports grouped together as 
serving the same city; 
g) "States concerned" means the States between which an air cargo 
service Is operated; 
h) "State of registration" means the Member State in which the 
Community air cargo carrier is registered. 
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Operating Licences 
Article 3 
1. The Council shall adopt, on the basis of a Commission proposal to 
be submitted at the latest the 1st of July 1991, and for 
implementation at the latest the 1st of July 1992, common rules 
concerning the granting of operating licences as air cargo carriers 
to undertakings established in the Community. 
2. Until such common rules enter in force Member States shall, on a 
non-discriminatory basis, grant such licences a/id ensure that air 
cargo carriers established on their territory apply technical, 
operational and economic requirements. Member States shall publish 
such requirements and communicate them to the Commission. 
Market Access 
Article 4 
1. Community air cargo carriers, duly authorised under Article 3 shall 
be permitted to exercise third, fourth and fifth-freedom traffic 
rights between airports or airport systems In one Member State to 
airports or airport systems in another Member State when these 
airports or airport systems are open for Intra-Communlty air cargo 
services. 
2. In operating Intra-Communlty air cargo services Community air cargo 
carriers shall be permitted by the State concerned to exercise 
cabotage between points within that Member State when the Community 
air cargo carrier meets the common rules establishing according to 
Article 3. Until such common rules have been established, the 
Community air cargo carrier must meet the technical, operational 
and economic requirements referred to In Article 3(2) of the Member 
State within which cabotage will be exercised. 
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3. In operating Intra-Communlty air cargo services Community air cargo 
carriers shall be permitted by the States concerned to exercise 
traffic rights on routes between Member States without calling at 
their State of registration. 
4. Member States shall not oppose the operation by Community air cargo 
carriers of fifth-freedom air services between an airport within 
the Community and an airport In a third country provided that the 
authorities of the third country concerned agree to the service In 
quest Ion. 
Operating flex lb 111ty 
Article 5 
1. Community air cargo carriers may change aircraft at any point on a 
route and to freely position aircraft. 
2. Subject to the provisions of Article 7 there shall be no 
restrictions on frequency of service, aircraft type and/or the 
amount of cargo and mail that may be carried. 
Conditions for the exercice of traffic rights 
Article 6 
This Regulation shall not affect a Member States' right to regulate In 
a non-discriminatory way the distribution of traffic between the 
airports within an airport system. 
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Article 7 
1. The exercise of traffic rights is subject to national, regional or 
local operational and technical published rules relating to the 
protection of the environment, social conditions, allocation of 
slots and safety and, in particular, to the following conditions: 
a) the airport or airport system concerned must have sufficient 
facilities to accommodate the service; 
b) navigational aids must be sufficient to accommodate the 
service. 
2. When the conditions in paragraph 1 are not met, a Member State may, 
on a non-discriminatory basis, impose conditions on, limit or 
refuse the exercice of the traffic rights. Before taking such a 
measure It shall inform the Commission and provide It with all the 
necessary elements of information. The Commission shall examine the 
situation and within 2 months decide whether the Member State may 
take the measure. 
PrIcing 
Article 8 
1. Community air carriers shall publish all available cargo rates. 
2. Air carriers operating air cargo services, or cargo services In 
combination with passengers within the Community shall Inform the 
States concerned of their cargo rates applicable to the carriage of 
cargo and/or mail on an airport to airport basis 30 days before 
their Introduction. 
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3. The State or States concerned may notify the Commission within 14 
days after receipt of the information by the air carriers when It 
is considered that the cargo rates do not include a sufficient 
margin to ensure satisfactory technical and safety standards. The 
State or States concerned shall, In particular, examine in detail a 
cargo rate which Is 20% lower than the corresponding rate In force 
during the previous corresponding season. 
4. The Commission may give notice of disapproval of cargo rates which 
have been notified to it until 7 days before the envisaged day of 
introduction. In the absence of such notice cargo rates may be 
applied from that day onwards. 
Final Provision 
Article 9 
This Regulation shall enter into force on 1 July 1990. 
This Regulation shall be binding In Its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the Council, 
The President 

ISSN 0254-1475 
COM(90) 63 final 
DOCUMENTS 
EN 07 
Catalogue number : CB-CO-90-103-EN-C 
ISBN 92-77-58234-0 
Office for Official Publications of the European Communities 
L-2985 Luxembourg