WRITTEN QUESTION E-3363/01

by Charles Tannock (PPE-DE), Theresa Villiers (PPE-DE)and Piia-Noora Kauppi (PPE-DE) to the Commission

(6 December 2001)

Subject: Cabotage, the future of the European airline industry and competition for slots

Rather than resorting to bail-outs and the provision of anti-competitive state-aids, does the Commission accept that the best way to achieve the reconstruction of the ailing European airline industry which Commissioner de Palacio has been calling for in recent weeks would be not only to facilitate airline mergers, as well as the absorption, where appropriate, of less-efficient carriers by more efficient carriers, but to encourage this process by implementing a genuine single market within the European Union so that a British/Dutch/Finnish airline, for example, could fly passengers from Madrid to Rome or a German/Italian/Spanish carrier fly passengers from Athens to Copenhagen, and to ensure that decontrol of routes would be matched by decontrol of gates and slots (through the operation of standard lease terms) so that efficiency and good management rather than the simple possession of airport facilities would be the basis of continuing success? If so, what legal impediments, as opposed to political obstacles, currently stand in the way of the Commission achieving such objectives?

Does the Commission also accept that this would be the best way to generate thriving and successful European carriers which could compete effectively with their north American counterparts, and that such reforms could form the basis of a super open-skies agreement which would allow a French/Danish/Portuguese airline which had flown from across the Atlantic from Paris to pick-up passengers in New York on the way to Chicago or San Diego whilst a U. S. airline which had stopped-off in London on its way to Athens would be free to pick-up passengers for the onward journey?

Finally, does the Commission believe that its recent decision not to reallocate for an indefinite period a number of unused slots to airlines that want to use them is the right way to achieve the reconstruction in the industry that Commissioner de Palacio has spoken of, and what are the legal limits to the Commission's discretion in this area?

Answer given by Mrs de Palacio on behalf of the Commission

(29 January 2002)

The Commission agrees that state aid is not the solution to the problems of the Community air transport industry and that a vigourous internal market is the key to developing stronger Community airlines. Under existing Community law, all Community airlines already enjoy complete, fair and non-discriminatory access to the entire Community market. Such airlines may fly between any two airports in the Community regardless of which Member State they are based in. The Community law requires that the slot allocation is performed in a fair and non discriminatory manner. Community airlines all have an equal right to apply for slots. It is only on international routes connecting Member States with destinations outside the Community that the right to provide services is still restricted by nationality. This has prevented the development of a truly integrated Community air transport industry. The Commission is currently challenging this situation in the Court of Justice.

A comprehensive agreement between the United States and the Union would be a major step forward for the European industry. It would give Union and United States airlines more freedom to provide services and would also allow international investment to take place in aviation in the same way as in other major industries. It is for this reason that the Commission has requested a mandate from the Council to begin negotiations with the United States. So far, the Council has refused to grant such a mandate.

As a result of the current economic problems facing the airline industry after 11 September 2001, many airlines withdrew air services on a temporary basis, leaving some of their slots unused. Normally, such unused slots are taken away from the air carrier concerned at the end of the season and reallocated to other airlines. Given the exceptional nature of the events that lead so may airlines to cancel services, the Commission took the view that it was appropriate to allow airlines to keep the slots that remained unused at the end of the Summer season in October 2001 instead of reallocating them as usual. The Commission will make a further formal proposal to the Council and Parliament to confirm this position when the current winter season ends in March 2002. This will allow services to be reinstated as demand recovers. However, this is a temporary and exceptional measure and it should not have an effect on the broader restructuring process.