PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ON FARES AND RATES FOR AIR SERVICES
Date: 1991-07-18
Institutions: European Commission
Subjects: air freight rate, air transport, carriage of passengers, freight rate, intra-EU transport

COMMISSION OF THE EUROPEAN  COMMUNITIES 

C0M(91) 275 final 

Brussels,  18 September 1991 

COMPLETION OF THE CIVIL AVIATION POLICY  IN THE EUROPEAN  COMMUNITIES 

TOWARDS SINGLE MARKET CONDITIONS 

w 

Proposal  for a 
COUNCIL REGULATION (EEC) 

on  licensing of air carriers 

Proposal  for a 
COUNCIL REGULATION (EEC) 

on access for air carriers to intra-Community air routes 

Proposal  for a 
COUNCIL REGULATION (EEC) 

on fares and rates for air services 

(presented by the Commission) 

Hsgjms.-SKSs; 

-  2 -

EXPLANATORY  MEMORANDUM 

I.  INTRODUCTION 

The  second  phase  of  the  air  transport  policy  as  approved  in June  1990 
also made  clear  the steps  which  have  to be  taken before  1 January  1993 
in  respect  of  further  liberalisation.  However,  it  must  be  recognised 
that  liberalisation  is  only  one  element  in  the  common  air  transport 
policy  and 
it  might  therefore  be  useful  shortly  to  situate 
liberalisation  in the overall  picture. 

II. OVERALL  POLICY 

Objectives 

The  ability  of  the  air  transport  system  to bring  people  from  all  parts 
of  the  Community  and  abroad  quickly  together  is  an  indispensable 
element  for  the  integration  process  within  the  Community  and  for  the 
development  of  closer  relations  between  the  Community  and  other  parts 
of  the worId. 

Over  longer  distances  air  transport  has  to carry  out  an  essential  task 
for  fulfilling  consumer  demand  and  for  the  economic  and  social 
integration process  in the  Community. 

It  may  serve  to  establish  closer  and  quicker  links  not  only  between 
central  regions  but  also  between  peripheral  and  central  parts  of  the 
Community. 
The  latter  point  is of  particular  importance  because  air 
links  may  help  -  in  conjunction  with  improved  telecommunications 
systems -  to  overcome  disadvantages  for  peripheral  regions  and 
facilitate,  thereby,  regional  economic  development,  in  particular,  in 
the  field  of  services  including  tourism. 
The  main  importance  of  air 
transport  in  the  Community  relates  to  the  transport  of  people  but  air 
cargo  should  not  be  forgotten. 

A more  specific  objective  in this  context  is the  need  to establish  air 
links serving  less developed  peripheral  regions with  low traffic  demand 
where  the actual  and  potential  traffic  volume on  these  routes would  not 
In  such  instances  the  air  transport 
Justify  a  commercial  service. 
system  may  therefore  have  to  fulfil  occasional  public  service 
requirements. 

-  3 

The  importance  of  regular  air  links  between  the  major  centres  of  the 
Community  and  all  other  parts of  the world  is self-explanatory  in view 
of  the  close  interrelationship  between  the  existence  of  direct  air 
links and  economic  cooperation.  An extensive  external  network  is to be 
considered  as  a  prerequisite  of  developing  good  economic  and  other 
relations  between  the  Community  and  the  rest  of  the  world. 
In  this 
context  air  cargo assumes a much more  important  role. 

Apart  from  these  basic  transport  aims,  a  number  of  further  objectives 
exist  and must  be  considered. 

It  is  clear  that  the  transport  function  would  suffer  dramatically  if 
the  cost  of  transport  is  too  high.  This  might  not  be  critical  when 
other  modes  of  transport  may  serve  but  for  distances  over  1000 km  air 
transport  is of  particular  importance and  fares must  be kept  reasonably 
low. 

In many  areas  of  the  Community  tourism  is  dependent  on  air  transport 
being available  at  low cost. 

It  is  also  necessary  to  look  at  quality  of  services  for  passengers 
(safety, reliability,  frequency, choice, flexibility). 

Air  transport  activities  depend  on  sufficient  infrastructure  being 
available  and  the provision of  such  facilities  is not  without  problems 
in particular  taking  the environmental  effects  into consideration. 

It  is  necessary  to  ensure  that  air  transport  is  provided  on  a  sound 
financial  basis. 
This  is  necessary  not  only  to  ensure  a  reliable 
service  to  the  passengers  and  shippers  but  also  to  ensure  acceptable 
working  conditions. 

It  is  important  that  the Community  aviation  industry  is competitive  at 
world-wide  level  in  view  of  the  important  role  air  transport  and  air 
transport-related  activities, for example, the  aerospace  industry  play 
in  creating  highly  qualified  Jobs,  in  the  development  of  new 
technologies,  also  in  other  sectors  and  -  last  but  not  least  -  for 
balance of  payments  considerations. 

As  a  consequence  the  common  air  transport  policy  must  on  the  one  hand 
ensure  a  financially  healthy  industry  providing  a  certain  economic 
stability  and  reasonable  conditions  for  employment  and  on  the  other 
hand  ensure  a  market  structure  where  air  carriers  can  adapt  their 
operations  according  to the growth  and shifts  in the market  and  provide 
sufficient  choice of  services  to the consumer  at  reasonable prices. 

-  4 -

Experience  has  shown  that  competition  is desirable  in order  to  achieve 
these objectives.  However,  a completely  unregulated  market  may  lead  to 
abuse, and  indeed  to anticompetitive  behaviour  and  a certain  regulation 
is  therefore  necessary  to  guard  against  such  practices  and  to  protect 
consumers. 

However,  there  should  be no need  to  intervene unless  things go wrong. 

At  any  rate  the  regulatory  framework  which  is to  remain  or  which  will 
be  created,  should  create  a  situation  where  unfair  advantages  to 
individual  air  carriers  will  be  banned  in particular  if  they  would  be 
at  the expense of  safety. 

These  objectives 
policy  : 

have  led  to  the  development  of  four  main  areas  of 

A. Liberalisat ion 
B. Harmonisation 
C.  Infrastructure 
D.  External  policy. 

A.  LIBERALISATION 

1.  Air  transport  policy 

Four  different  elements  are covered,  namely: air  fares, market  access, 
capacity  control  and  licensing  of  air  carriers. The  aim  of  this  policy 
is  to  ensure  the  creation  of  a  market  structure  which  will  encourage 
competition  and  provide  flexibility  in  the market  so  that  air  carriers 
can  pursue  their  operations  on  a  commercial  basis  and  so  that  choice 
will  be  available  to  the  consumer.  The  policy  Implements  the  Treaty 
principles  of  freedom  to  provide  services  and  the  right  of 
establishment.  The  present  proposals  aim  to  complete  the  policy  in 
this area  and  further  details are presented  on page  13 et  seq. 

2.  Protection against  anticompetitive  behaviour 

Competition 

The  Commission  has  adequate  means  to  intervene  against  anticompetitive 
conduct. 
recently 
possibilities  have  been  added  to  intervene  immediately  against 
predatory  behaviour. At  the same  time  the Commission  has been given  the 
possibility  to exempt  co-operation  between  air  carriers  which  leads  to 
a more efficient  air  transport  system  to the benefit  of users. 

regulations 

in  place 

are 

and 

The  Commission  has  also  power  to  control  State  aids  in order  to  avoid 
distortion of  competition. 

-  5 -

3.  Protection  against  unfair  behaviour 

The  Commission  has  already  been  given  a  very  direct  role  to  control 
unfair  behaviour.  It  has  power  of  decision  concerning  too  high  or  too 
low  fares,  discriminatory  traffic  restrictions  at  airports,  excessive 
protection  of  new  air  services,  too  restrictive  public  service 
obligations  and  the  freezing  of or  reduction  in capacity  growth  in the 
case of  economic  hardship. 

B.  HARMONISATION 

The  very  fact  that  the  liberalisation  really  will  create  one  air 
transport  market  within  the  Community  has  created  the  need  to  ensure 
that  norms  and  standards  In a number  of  areas  are  harmonised  in order 
to ensure  a  level  playing  field  for  competition  among  EEC  air  carriers 
irrespective of where  in the EEC they are established. 

It  has  therefore  been  agreed  that  harmonisation  must  take  place  in  a 
great many  areas amongst  which  the most  important  are  the  following. 

1.  Safety 

For  accident  Investigation,  cooperation  and  exchange  of  expertise  a 
directive already  exists.  Improvements are under  consideration. 

Common  airworthiness  requirements  (JARs) will  soon  be  approved  by  the 
CouncI I. 

Common  requirements  for  I icences are under  development. 

The same  is true  for  flight-time  limitations. 

The  need  for  proposals  for  the  last  three  subjects  has  been  confirmed 
by  the CouncI I. 

2.  Fair  competition 

A  code  of  conduct  for  Computer  reservation  systems  (CRS)  is  in  force 
which  ensures  unbiased  competition  and  to  some  extent  consumer 
protect ion. 

A  code  of  conduct  for  al locat ion of  slots  has  been  proposed  with  the 
purpose  of  ensuring  transparency,  non-discrimination  and  a  certain 
movement  in  the  market. 
This  proposal  is also  a  response  to  a  need 
expressed  by  the Council. 

- 6 -

Regular  consultation  between  airports  and  users  has  been  proposed. 
These  rules  seek  to  ensure  the  best  possible  use  of  scarce  facilities 
but  the proposals  also  introduce  the principle of  cost-re Iatedness for 
airport  charges. 
In  addition,  it  is  proposed  that  airports  as  part 
and  parcel  of  the consultation  process must  be entitled  to participate 
in slot  allocation  procedures. This whole  initiative  should  be  seen  as 
a  first  step  towards  coming  to  terms  with  the  capacity  problem  at 
airports. 

3.  Consumer  protection 

Denied  boarding  compensation rules have been adopted. 

A code of  conduct  for  travel  agents  is under  development. 

Common  rules  for  IiabiIity  (Warsaw Convention) are being  developed. 

4.  Env i ronment 

Noise  limitations  in  the  form  of  non-operation  rules  for  aircraft  not 
conforming  to chapter  2 were adopted  already  10 years ago. Non-addition 
rules  for  aircraft  not  conforming  to chapter  3 are  also  in force. Non-
operation  rules  for  aircraft  not  conforming  to  chapter  3  has  recently 
been proposed. The Council  is expected  to agree quickly. 

Airport  environmental  rules are under  development. 

C.  INFRASTRUCTURE 

Serious  capacity  problems  exist  in  the  European  aviation  system. 
These capacity  problems  derive both  from an unsatisfactory  air  traffic 
control  system  and  from  insufficient  runway  capacity  at  important 
Legislation  will  be  necessary  in 
economic  centers  of  the  Community. 
both of  these areas. 

In  fact  the  Council  has  itself  called  for  legislation  on  common 
specifications for ATC equipment. 

The  Commission  is also  studying  the situation  at  all  major  airports  in 
the  Community  with  a  view  in particular  to  investigate  whether  a  kind 
of  environmental  contract  could  be  established  which  would  allow 
capacity  increases  at  airports on  condition  that  certain  environmental 
action  is taken. 
The study  should be finished  by  July  and  immediately 
afterwards preparation of  legislative  action will  be commenced. 

These problems will  continue well  beyond 1992. 

-  7 -

D.  EXTERNAL  RELATIONS 

Community  legislation  already  exists  for  air  fares,  capacity  control 
and market  access and  for  a great  many other  areas. 
These  first  three 
matters  are  traditionally  the  backbone  of  any  bilateral  agreement. 
External  relations  and  the  discussion  of  Community  competence  is 
therefore  not  only  an  intellectually  amusing  question. 
The  fact  is 
that  an  agreement  between  a Member  State  and  a  third  country  in nearly 
all  instances will  affect  the commercial  situation  inside  the  Community 
for air  carriers  from  the other  Member  States. 

There  are  thus  important  reasons  for  the  Community  to  deal  with  the 
matter  of  external  competence  with  urgency.  The  procedural  problems 
are  dealt  with  in a specific  proposal  COM  (90) but  action must  soon  be 
taken  in order  to avoid  squandering  Community  assets. 

III. PROPOSALS  FOR  LIBERALISATION 

Three proposals are  to be  found  in the annex  namely  : 

a.  Licensing of  air  carriers 
b.  Market  access 
c.  Air  fares and  rates 

In  order  to  establish  a  clear  legal  situation  these  three  proposals 
will  cover  all  types  of  civil  aviation. 
This  means  for  example  that 
air  cargo has been  incorporated  in these texts. 

The  Council  requested  in  art.  3  of  Regulation  2343  that  proposals 
should  be  put  forward  concerning  licensing  of  air  carriers  and  route 
licensing.  A  specific  proposal  has  been  put  forward  on  licensing  of 
air  carriers  but  with  regard  to  route  licenses  it  was  felt  that  it 
would  be  inappropriate  to  discriminate  between  air  carriers  operating 
into  a  Member  State  and  air  carriers  established  in  the  Member  State, 
I.e.  reverse  discrimination  should  not  take  place.  The  proposal  on 
route  licensing  has  therefore  been  incorporated  in  the  proposal  on 
market  access  which  ensures  that  air  carriers  are  treated  in  the  same 
way  independently of  In which Member  State  they  are  licensed. 

-  8 -

a.  Licensing  of  air  carriers 

At  present  no  specific  Community  rules  governing  the  relationship 
between  the  competent  national  authorities  and  carriers  established  or 
to  be  established  in  the  Member  States  exist.  However,  the  Council 
has,  in  its  decision  on  the  second  phase,  stipulated  that  it  is 
necessary  to base  policy  in this area on harmonised  Community  criteria 
to be  implemented  from  1.7.1992 onwards. 

The  Commission's  proposals  for  the  second  aviation  package  already 
contained  a first  set  of  rules  for governing  decisions on operating  and 
route  licensing.  The  basic  aim  at  that  time  was  adoption  of  the 
principle  that  when  an  applicant  company  is considered  as economically 
and  technically  fit  then  it  is  entitled  to  be  licensed  as  an  air 
carr1er. 

The  Council,  while  recognizing  the  need  for  Community  action,  reached 
the  conclusion  that  common  rules  concerning  the  requirements  for 
economic  and  technical  fitness  must  be  adopted  prior  to  the 
implementation of  specific  commitments  in this area. 

The  Commission  always  considered  the  lack  of  a  coherent  policy  in  the 
area  of  issuing  (or  confirming) operating  licences  for  air  carriers  as 
a  major  outstanding  policy  question  in  the  area  of  market  access  and 
market  entry.  It has  therefore,  in close  cooperation  with  experts  from 
Member  States  and  interested  parties  (AEA,  ACE,  ERA  and  consumer 
organisations) thoroughly  examined  this  issue.  It has,  in this  context, 
carefully  analysed  existing  systems  in Member  States and other  parts of 
the world  (U.S.A.). 

All  interested  parties  and  experts  agreed  that  a high  degree  of  safety 
and  a  sufficient  degree  of  stability  of  air  services  have  to  be 
considered  as  the main objectives  to be achieved. 

The  Commission,  accordingly,  identified  five  key  questions  to  be 
addressed  : 

1.  Which  are  the  requirements  in  relation  to  ownership  and 

location ? 

2.  How  can  reasonable  and  meaningful  economic  and  financial 

standards  be defined? 

3.  Is  it  necessary  or  useful  to  establish  different  requirements 

for  different  types of  air  carriers  (or operations) ? 

(2) 

- 9 -

4.  Should  the  market  situation  in  general  be  taken  into  account 

when  deciding  on an application? 

5.  Which  standards  for  the  assessment  of  the  technical  fitness 

should  apply? 

The  Commission,  after  having  carefully  analysed  basic  options  related 
to these  questions, arrived  at  the following conclusions  : 

ad  1  :  (see Art icle 4) 

Due  to  basic  characteristics  of  the  international  aviation 
system,  requirements  on  Community  ownership,  control  and 
location  are  required.  An  air  carrier  must  be  owned  and 
effectively  controlled  by a majority  of  Community  nationals 
and  the  majority  of  the  board  must  consist  of  such 
nat ionals. 

It  is,  however,  clear  that  the  ownership  limitations  may 
hinder  a  normal  business  development  in  the  interests  of 
Community  air  carriers. 
It  is,  therefore,  desirable  to 
introduce  a possibility  to conclude more  liberal  agreements 
with  third  countries  on  a  mutually  beneficial  basis, 
without  prejudice  to  international  commitments. 

ad  2  ;  (see Art icle 5) 

Financial  and  economic  requirements  need  to  be  defined  in 
order  to  fulfil  the  underlying  political  objective  of 
achieving  a  sufficient  degree  of  stability  of  air  services 
(i.e.  only  financially  sound  carriers  shall  operate).  The 
rules  need  to  be  well-balanced  in order,  on  the  one  hand, 
to  implement  in  all  Member  States  effective  and  clear-cut 
rules  and,  on  the  other  hand,  to  avoid  too  rigid  and  too 
bureaucratic  standards  which  would  damage  the  air  carriers 
possibilities  in  terms  of  market  developments. 
The 
principle  of  non-discrimination  must  be  ensured  in  all 
instances. 

The  Commission  has  opted  for  a  set  of  simple  but  clear 
economic  and  financial  standards defining  acceptable  levels 
below which  a  licence  should  not  be granted  or  maintained. 

-  10 -

They  differ  between  new  entrants  and  already  established 
carriers only  to the extent  necessary  for  ensuring  that  new 
entrants  start  operations  on  a  sound  financial  and 
econom i ca i bas i s. 

The  standards  concern  financial  liquidity,  monitoring  of 
financial  developments,  the  overall  financial  structure, 
insurance  requirements  and duration of  the  license. 

ad  3  (see Art icle 5) 

The  Commission  has  very  carefully  examined  the  need  for 
linking  operating  licences  to different  types  or  scopes  of 
economic  activity  (i.e. scheduled, non-scheduled,  regional, 
etc.) 

These  studies  have  led  the Commission  to  the conclusion  to 
abstain, apart  from  somewhat  less strict  rules  for  carriers 
operating  with  very  small  aircraft,  from  proposing  specific 
rules  for  specific  types of  air  carriers. 

Apart  from  the more  general  objective  to  avoid  too  complex 
rules  this conclusion  is based on  the need  not  to establish 
a  regulatory  segmentation  between  very  often  overlapping 
markets  and  thereby  create  barriers  for  air  carriers  to 
react 
business 
opportunities. 

following 

changing 

rapidly 

quickly 

however, 

Secondly, 
the 
the  Commission 
requirement  of  a  business  plan  to  be  provided  by  the 
applicant  carriers  allows  in  a  flex ible  way  to  take  into 
consideration  the  financial  potential  of  a  company  in 
relation  to  the  scope  and  type  of  the  envisaged  activities 
as  well  as  the  economic  consequences  of  changes  in  the 
pattern of  operation. 

feels 

that 

ad  4 : 

Certain  Member  States  and  airline  organizations  feel  that 
the  impact  of  a newly  licensed  air  carrier  on  the market  in 
general  and  on  the  economics  of  already  established 
carriers  needs  to  be,  in  one  way  or  another,  explicitly 
taken  into  account  when  deciding  on  an  individual 
application  for  an operating  licence. 

-  11  -

The  Commission  recognizes  the  potential  importance  of  this 
argument  and  has,  therefore,  undertaken  a  thorough 
examination  of  ail  elements  related  to this problem.  It has 
reached  the conclusion  that  these aspects  can  to  the degree 
necessary  be  taken  into account  by  requesting  the  applicant 
carrier  to present  a business  plan. 

In their  assessment  of  these business plans  the authorities 
will  have  a  reasonable  possibility  to  evaluate  the 
soundness  of  the  underlying  assumptions  on  market 
developments  and  to  identify  completely  unrealistic plans. 

The  Commission,  however,  does  not  share  the  concerns  of 
certain  parties  to  provide,  apart  from  checking  to  a 
reasonable  extent  the  economic  feasibility  of  a  business 
plan  for  a  new  air  carrier,  for  a  specific  protection  of 
the  interests  of  already  established  carriers.  In view of 
a  number  of  economic  barriers  to market  entry  which  exist 
anyway  such  an  additional  protection  would  imply  the  risk 
of  creating  rigid market  structures which, at  the end, will 
work  against  the global  competitiveness of  the  Community's 
air Iine  industry. 

Finally,  the  highly  useful  role  which  new  operators  can 
play  for  completing  the  network  and  for  identifying  unused 
market  opportunities  needs  to  be  recognized  by  an 
appropriate  regulatory  framework  on operating  licences. 

ad 5  :  (see Art icle 9) 

Technical  standards  cannot  be  compromised  because  of  the 
safety  objectives  underlying  the  standards.  Therefore,  a 
license  should  not  be  granted  or  maintained  for  an  air 
carrier  (or  applicant  company) not  meeting  these standards. 

In  the  long  run  technical  standards  should  refer  to  JAA-
requirements 
(AOCs) 
currently  under  development.  Until  these  rules  come  into 
effect  Member  States  shall  continue  to  decide  on  the  basis 
of  current  national  requirements. 

air  operators 

certificates 

for 

-  12 -

b.  Market  access 

3rd, 4th  and  5th  freedom  traffic  rights have  been  created  by  the  second 
package  between  all  airports  in  one  Member  State  to  all  airports  in 
another  Member  State.  The  5th  freedom  traffic  rights  are  somewhat 
limited  at  present. From  the  1st of  January  1993  the Council  has  agreed 
that  5th  freedom  will  be  fully  implemented  and  cabotage  will  be 
introduced. 

This opening  of market  access possibilities will  naturally open  the way 
for more  competition. On  the one  hand  this  is positive but  on  the other 
hand  it may  make  life more  difficult  for  new  entrants  and  it  does  not 
ensure  the  establishment  of  air  services  from  some  regions  where  they 
should  exist  for  regional  policy  reasons. 

In  order  to  address  these  problems  a  possibility  already  exists  to 
protect  an  airline  on  a new  route  for  up  to 2 years  and  to  introduce a 
public service obligation  for  a  limited period. These  provisions  should 
be retained  and, where  necessary,  developed  further. 

5th  freedom  traffic  rights  are  still  limited  but  the  restrictions 
should  in  accordance  with  Council  commitments  be  removed  for  both 
passenger  flights and  air  cargo. 

In two other  main  areas  the Commission  has  had  to analyse  basic  policy 
options and  alternatives when  preparing  its proposals on market  access. 

In  addition  to  the  rules  concerning  air  carrier  licences  (see  above) 
the Council  has  also  asked  the Commission  to put  forward  proposals  for 
rules on  route  Iicences.  It would  seem  clear  that  any  air  carrier  which 
has  been  licensed  by  a Member  State  must  have  an  equal  opportunity  to 
be  given  a  route  licence  and  it  would  be  illogical  that  multiple 
designation  thresholds  (if  they  are  retained)  would  only  be  used  for 
incoming  air  carriers  and  not  also  with  respect  to  the  country  of 
or ig in as we I I. 

It  may  be  argued,  however,  that  air  carriers  operating  on  routes  not 
covered  by  public  service  requirements  or  rules  on  the  protection  of 
new  services  operated  with  small  aircraft  need  to  some  extent  to  be 
protected  against  new entrants. 

13 -

Such  an  approach  would  have,  if  any,  some  kind  of  Justification  only 
for  "not  so  busy"-routes which  would  not  Justify  the operation  by  more 
than  2  or  3  carriers.  The  Commission  has  carefully  and  without  any 
pre-concei ved  ideas  examined  the  need  for  some  kind  of  a  non 
discriminatory  selection  procedure  to be applied  for  thinner  routes not 
falling  within  the  scope  of  the  public  service  requirements.  It  has 
reached  the  conclusion  that  further  safeguards  in  addition  to  already 
protected  areas  would  -  at  the  end  -  most  probably  turn  out  to  be 
counter-productive  because  it  would  stifle  the  normal  competitive 
effects  of  market  forces.  This  conclusion  is based  on  the  following 
considerations : 

new  legal  barriers  to  market  access,  in  addition  to  existing 
factual  barriers  resulting  from  infrastructure  bottlenecks  and 
grandfather  rights,  could  largely  undermine  the  room  for 
creating  and  maintaining  the  necessary  degree  of  competition 
which  is essential  for  efficiency  improvements  in the airline 
industry; 

additional  selection  procedures aiming  for  transparent  and  non 
discriminatory  decisions  on  the  basis  of  objective  criteria 
cannot  be  established  without  creating  new  administrative 
machinery.  The  direct  and  indirect  costs  related  to  such 
bureaucratic procedures  outweigh  possible  benefits which  would 
materialize  only  in very  specific  situations. 

Instead  of  proposing  separate  rules  to  protect  these  services  the 
Commission  has  decided  to  propose  a  redefinition  of  the  rules  related 
to public  services  requirements. 
It  is proposed  to use  the  threshold 
on  traffic  volume  (i.e. 30.000 seats per  year) only  for  the possibility 
of  limiting  access  to one carrier  and  for  the  temporary  protection  for 
new  services  operated  with  smaller  aircraft. 
It  shall  not  apply, 
however,  for  the  possibility  to  define  more  permanent  public  service 
requirements. 

Cabotage 

The  second  basic  question  refers  to  the  introduction  of  cabotage 
The  Council  of  Transport  Ministers  already  confirmed  that 
rights. 
these  rights  belong  to  the  internal  market  concept. 
This  would 
basically  mean  that  it  is necessary  to  introduce  these  rights  to  the 
full  extent  from  1 January  1993. 

14 -

The  Commission  has  carefully  examined  whether  there  is  a  need  to 
introduce  these  rights  gradually 
in  order  to  prevent  market 
This  examination  has  led  to  the  conclusion  that  the 
disruptions. 
exercise  of  cabotage  rights would  only  be of  limited  economic  interest 
for  air  carriers,  in particular,  If the operation would  be unrelated  to 
the air  carrier's  normal  network  i.e.  "stand-aloneM-cabotage. 

The start  up of  a cabotage  service will  need  a very  careful  preparation 
and  there  would  clearly,  at  least  for  a  time, exist  a  handicap  in  the 
competition with  a  "native" air  carrier. 

Under  these  circumstances  the  Commission  does  not  see  a  case  to 
establish  specific  rules  delaying  the  full  achievement  of  the  internal 
market  in this  specific  area. 

The  Commission  also  feels  that  specific  situations  can  be  dealt  with 
by having  recourse  to public  service  requirements. 

Therefore,  the Commission  has  reached  the conclusion,  that  it would  not 
make  much  sense  to  establish  transitional  rules  to  be  applied  to  the 
availibility of  these rights. 

c.  Air  Fares  and  rates 

Considerable  pricing  freedom  has already  been  created  in particular  for 
non-fully  flexible  fares  in  the  second  package  approved  in  1990<1). 
However,  it  has  been  agreed  by  the  Council  of  Ministers  that  from  the 
1st  of  January  1993  the  Community  system  will  be  a  fully  developed 
system of  double  disapproval  for  all  air  fares. 

However,  the  normal  situation  in  the  internal  market  Is  for  the 
Undertakings  to  be  able  to  conduct  their  business  in  a  normal 
commercial  environment.  This  means  that  where  competition  exists 
Undertakings  should  be  able  to  set  their  pricing  policy  freely.  This 
has  so  far  not  been  the  case  in  civil  aviation  except  for  certain 
promotional  fares  and  It  Is  not  the  case  with  the  double  disapproval 
system.  The Commission  therefore  proposes  that when  normal  competitive 
conditions  have been established  in civil  aviation  then pricing must  be 
free.  The  present  set of  proposals  needs a certain  time  to take effect 
but  after  three  years  this  should  be  the  case  except  where  special 
conditions  exist  such  as  congestion  and  it  is  therefore  proposed  that 
free  pricing  should  be  introduced  in  1996  for  scheduled  air  services. 
The  present  situation  of  free  pricing  for  non  scheduled  air  services 
and  air  cargo  should  not  be modified. 

(1) Council  Regulation  No. 2342/90  of  24  July  1990;  O.J.  L  217  of 

11.8.1990 

-  15 -

The  double  disapproval  system  already  exists  in  the  second  package  and 
has been overtaken  with only  a few  technical  changes. 

However, one  question  needs  to be  faced. 

It  concerns  the  existing  system  of  safeguards  which  calls  upon  the 
Commission  to examine  fares  if requested  by a Member  State. This can be 
quite cumbersome  if not  limited  in one way or  another. 

A move  to  the  double  disapproval  system  where  today  automatic  approval 
already  exists may  also be questioned. 

The  issue  has  been  discussed  with  national  experts  and  interested 
parties  (airline  industry,  consumers)  and  to  a  great  extent  agreement 
was  reached  that  : 

a)  The principle  of  cost  relatedness  should  be  maintained. 

b)  Safeguards  should  be  maintained  but  limited  to  situations  where 
consumer  interests  would  be  in  particular  at  risk  i.e.  the  most 
used  fully  flexible  fares on  routes where competition  is  limited. 

On  the  basis  of  these  principles  the  Commission  proposes  to  redefine 
slightly  the procedures  to be applied  in the case of  a dispute  whether 
air  fares  need  to be disapproved  or  not  (Article 7 ). It  is proposed  to 
restrict  the  possibility  of  submitting  an  air  fare  for  examination  by 
the  Commission  to  fully  flexible  fares  being  charged  on  routes  on 
which,  for  one  reason  or  another,  competition  is  limited.  This  will 
restrict  the  use  of  safeguards  to  be  added  to  a  double-disapproval 
system  to  situations  where  this  system  would  not  work  well  because  of 
insufficient  competition. 

It  is  also  proposed  that  an  air  fare  which  has  been  submitted  for 
examination  by  the  Commission  shall  not  be  suspended  but  will  remain 
in  force  during  the  examination.  This  approach  will  avoid  building  a 
new  complex  fare  examination  machinery  at  Community 
level  and 
undermining  the  philosophy  of  the  double-disapproval  system  by  moving 
back  to an over-regulated  approach. 

-  16 -

The  question  remains  as  to  whether  the  application  of  a  double 
disapproval  system  would  be  a  setback  in  areas  where  today  automatic 
approval  is given. The Commission,  while  recognizing  that  such  a change 
cou id  be  seen  as  moving  backwards  to  re-regulating  liberalized  areas 
has  carefully  studied,  in  close  cooperation  with  experts  from  Member 
States,  options  aimed  at  avoiding  useless  re-regulatory  developments. 
It has  reached  the  conclusion  that  by  setting  aside  certain  fare-types 
from  the  use  of  complex  safeguard  procedures  combined  with  an 
automatic  approval  regime  for  fares  charged  in  conjunction  with 
Inclusive  Tour  arrangements  (IT  fares)  or  group  travels  (Article  4) 
the  risk  of  re-regulating  by  moving  towards  double-disapproval  as  the 
general  principle would  be  avoided. 

d.  A specific  Issue - Non-scheduled  air  services 

The  massive  presence  of  air  services  carried  out  by  non-scheduled  air 
carriers  Is  one  of  the  most  specific  features  of  the  intra-European 
transport  market.  In terms of  passenger-km's non-scheduled  airlines  are 
carrying  out  65 X of  all  transportation by  air  within  the  Community. 

Community  legislation  has  until  now  only  dealt  with  scheduled  air 
transport  ai 1 not  non-scheduled  (except  for  air  cargo).  The  scheduled 
airlines consequently  have been complaining  that  they  are subject  to an 
increasing  number  of  Community  rules  while  the  non-scheduled  air 
carriers  are  not. 

On  the  other  hand  market  access  liberalisation  for  scheduled  air 
services  is  now  to  some  extent  more  advanced  than  the  possibilities 
open  to  non-scheduled  air  carriers  so  these  air  carriers  are  also 
beginning  to  complain.  In  addition,  liberal  rules  on  fares  allow 
scheduled  air  carriers  to  compete  directly  with  non-scheduled  in  the 
leisure  travel  market  segment.  At  the  same  time,  non-scheduled  air 
carriers  are  increasingly  competing  directly  with  the  scheduled  air 
carriers  by  selling  seat  only without  any  accommodation. 

The  non-scheduled  air  services  are  very  important  for  the  tourism 
industry  in  many  regions  of  the  Community.  A  policy  which  would 
endanger  these  services would  therefore  be unwise  .  In this context  it 
is  important  to  recall  the  experience  in  the  USA  and  on  the  North 
Atlantic  when  competition  opened  up.  The  result  was  a  drastic 
reduction  in  the  market  share  of  non-scheduled  services.  The  reason 
was  to  a  large extent  that  air  carriers  could  only  offer  certain  types 
of  air  transport  on  non-scheduled  air  services  while  everything  could 
be  offered  on  the  scheduled  air  services.  There  was  also  a  certain 
preference  among  the  travelling  public  to  choose  a  scheduled  air 
service, when  it was available at  the same  price, over  a non-scheduled. 

3) 

-  17 -

In  the Community  the opportunities of  scheduled  air  services  have  been 
substantially  increased  already  and  the  present  package  will  further 
increase  these  possibilities.  The  situation 
is  therefore  that 
scheduled  air  services  can offer  virtually  anything  in the market  while 
non-scheduled  air  services  are only  allowed officially  to offer  certain 
products.  It  is  difficult  to  say  whether  it  is  this  difference  in 
market  opportunities or  whether  it  is the effect  of  a certain  recession 
but  the  fact  is  that  the  charter  market  has  been  suffering.  There  is 
basically  it  seems  a  danger  that  the  non-scheduled  air  services  are 
being  given  the  same  handicap  as  in  the  USA  and  on  the  North  Atlantic 
market. 

It  has  been  suggested  to  the  Commission  that  the  best  policy  would  be 
to  protect  the  non-scheduled  air  services.  This  is,  however,  not  a 
satisfactory  long  term  solution. 

One  possible  solution  would  be  a  specific  set  of  Community  rules  for 
non-scheduled  operations. These  could  parallel  the market  access  rules 
for  scheduled  operations  and  stipulate,  subject  to  competition  rules, 
free  pricing,  However,  if  the  rules  should  differ  from  those  for  the 
scheduled  operations,  the  danger  would  exist  for  a number  of  difficult 
discussions  and  complaints. The  risk  through  regulation of  artificially 
creating  new  market  fragmentation  meeting  no  consumer  needs  at  all 
should  not  be underestimated. 

Therefore,  a  straightforward  approach  would  be  to  propose  that  non-
scheduled  air  carriers  should  meet  exactly  the  same  obligations  as  a 
scheduled  air  carrier  in  areas  where  they  compete  directly.  But  then, 
they  should  also have  the same opportunities  in terms of  having  access 
to routes. 

The  Commission  has  received  mixed  signals  from  Member  States  and 
airline organizations on  this  issue.  It  is obvious  that  opinions on  how 
to  deal  with  this  problem  differ  even 
inside  the  relevant 
organizations.  Under  these  circumstances  the  Commission's  conclusions 
are mainly  based  on  its own  internal  assessment  of  this  problem. 

The Commission  has carefully  analysed  and  compared  the pros and  cons of 
these  two  basic  alternative  options.  This  examination  was  carried  out 
under  the  assumption  that  convincing  and  Important  reasons  must  be 
given 
rules  for  basically  the  same  product  be 
established. 

if  different 

-  18 -

The  Commission  is of  the  opinion  that  a  strong  case  for  establishing 
two  sets of  rules  does  not  exist.  It has  therefore  decided  to  propose 
to  integrate  the  different  air  transport  modes.  This  means  in 
particular  to  attach  basically  the  same  rules  on  fares  (with  specific 
provisions  for  IT-fares),  market  access  and  operating  licences  to  all 
air  carriers. 

This  policy  will  allow  air  carriers  to  decide  on  commercial  grounds 
whether  a  market  should  be  served  by  non-scheduled  or  scheduled  air 
services.  It would  also  allow  an  air  carrier  to develop  a market  with 
non-scheduled  services  and  then  gradually  Introduce  scheduled  air 
services.  This policy  approach  also  fits  logically with  the new market 
opening  represented  by  the proposal  on  licensing of  air  carriers. 

The  inclusion  of  charter  services  has  been  achieved  by  removing 
reference  to scheduled  air  services  in Regulations  Nos  2342 and  2343/90 
and  only  refer  to  air  services.  This  has  necessitated  an  article  on 
prices  for  charter  products  as well  as  a  definition  in  Regulation  No. 
2342/90.  It would  mean  that  market  access  provisions  will  apply  to air 
carriers  whether  they  operate  in scheduled  or  charter  mode.  They  would 
be  able  to  offer  "seat  only"  If  they  can  comply  with  the  Community 
rules  on  air  fares  and  on  allocation  of  route  rights.  However,  "seat 
only"  might  also  be  allowed  in  general  on  routes  open  for  multiple 
désignât ion. 

-  19 -

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

on  licensing of  air  carriers 

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^1), 

Having  regard  to  the opinion  of  the European  Par Iiament^2), 

Having  regard  to  the opinion of  the Economic  and  Social  Committee^3^, 

Whereas  it  is  important  to establish  an air  transport  policy  for  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  the  application  in  the  air  transport  sector  of  the  principle  of 

the  freedom  to provide  services  needs  to  take  into  account  the  specific 

characteristics of  the sector; 

(1) 

(2) 

(3) 

20  -

Whereas  in  Regulation  (EEC)  No  2 3 4 3 / 9 0( 1)  the  Council  decided  to  adopt 

for  implementation  not  later  than  1  July  1992  rules  governing  the 

requirements  in  relation  to  the  licensing  of  air  carriers; 

Whereas  it  is  important  to  define  non-discriminatory  requirements  in 

relation  to  the  location  and  the  control  of  the  undertaking  applying  for 

a  licence;  whereas  it  is  also  necessary  to  take  into  account  the  need 

to  provide  flexibility  in  relation  to  third  countries; 

Whereas  in  order  to  ensure  stability  of  service  it  is  necessary  to 

ensure  that  an  air  carrier  is at  all  times  operating  at  sound  economical 

and  high  safety  levels; 

Whereas  for  consumer  protection  reasons  it  is  important  to  ensure  that 

air  carriers  are  sufficiently  insured  in  respect  of  liability  risks; 

Whereas  within  the  internal  market  air  carriers  should  be  able  to  lease 

aircraft  registered  anywhere  in the  Community; 

Whereas  a  sound  and  effective  management  structure,  where  individuals 

appointed  to  senior  posts  have  suitable  experience  and  proven  competency 

in  aviation,  is  essential  for  ensuring  the  safe  conduct  of  air 

operations; 

Whereas  procedures  for  the  granting  of  licences  to  air  carriers  should 

be  transparent  and  non-discriminatory, 

(1) OJ  No  L  217,  11.8.1990,  p.8 

HAS ADOPTED  THIS  REGULATION 

-  21  -

Article 1 

1. 

This  Regulation  concerns  the  economic  and  technical  competency 

requirements  for  the  grant  and  retention  of  operational  licences 

and 

air  operators'  certificates. 

2. 

An  air  carrier  must  at  all  times  operate  at  sound  economical  and 

high 

safety  levels. 

Art icle  2 

For  the  purposes  of  this  Regulation: 

(a)  "undertaking"  means  any  natural  person,  any  legal  person,  whether 

profit-making  or  not,  or  any  official  body,  whether  having  its  own 

legal  personality  or  being  dependent  upon  an  authority  having  such 

personali ty; 

(b)  "air  carrier"  means  an  air  transport  undertaking  with  a  valid 

operat ing  I icence; 

(c)  "operating  licence"  means  an  authorisation  granted  by  the  State 

responsible  to  an  undertaking  permitting  it  to  carry  out  carriage 

by  air  of  passengers,  mail  and/or  cargo,  as  stated  in  the  licence, 

for  remuneration  and/or  hire; 

-  22 -

(d)  "air  operator's  certificate  (AOC)"  means  a  document  issued  by  the 

competent  authorities of  a State which  affirms  that  the operator  in 

question  is competent  to secure  the  safe  operation  of  his  aircraft 

for  the aviation  activities  specified  in the  certificate; 

(e)  "business  plan"  means  a  detailed  description  of  the  air  carrier's 

intended  commercial  activities  for  the  period  in  question,  in 

particular  in  relation  to  the  market  developments  and  investments 

to  be  carried  out,  including  the  financial  and  economical 

implications  of  these  activities; 

(f)  "management  account" means  a detailed  statement  of  income  and  costs 

for  the  period  in  question  including  a  breakdown  between  air 

transport-related  and other  activities  as well  as between  pecuniary 

and  non-pecuniary  elements. 

Art icle 3 

1. 

No  undertaking  shall  be  permitted  within  the  territory  of  the 

Community  to  carry  by  air  passengers,  mail  and/or  cargo  for 

remuneration  and/or  hire  unless  the  undertaking  has  been  granted 

the appropriate  operating  licence and AOC. 

2. 

No  operating  licence  shall  be granted  by  a Member  State  unless  the 

undertaking  concerned  has a valid  AOC. 

3. 

Member  States  shall  not  issue or maintain  in force  such  licences or 

certificates  when  the  requirements  of  this  Regulation  are  not 

complied  with. 

-  23 -

An undertaking  meeting  the  requirements  of  this Regulation  shall  be 

entitled  to  receive  such  a  licence and  certificate. 

OPERATING  LICENCE 

Art icle 4 

1. 

No  undertaking  shall  be  granted  an  operating  licence  by  a  Member 

State  unless  air  transport  is  its  main  occupation  and  the 

registered  office  and  principal  place  of  business  is  located  in 

that  Member  State. 

2. 

The  undertaking  must  be  owned  and  continue  to be owned  directly  or 

through  a  majority  shareholding  by  Member  States  and/or  nationals 

of  Member  States.  It must  at  all  times  be  effectively  controlled 

by  such  States  or  nationals.  The  majority  of  the  board  must  be 

representatives  of  such  States or  nationals. 

3. 

Notwithstanding  paragraph  2  air  carriers  which  have  already  been 

recognised  in Annex  I to Council  Regulations  (EEC) Nos  2343/90  and 

294/9l(1)  retain 

their 

rights  under 

this  and 

associated 

Regulations  as  long  as  they  meet  the  other  obligations  in  the 

present  Regulation. 

4. 

Derogation  from  paragraph  2  may  be  agreed  bilaterally  or 

multilaterally  between  third  countries  and  the  Commnity. 

5. 

Any  undertaking  which  has  a  controlling  shareholding  in  an  air 

carrier  must  meet  the  requirements of  paragraph  2. 

6. 

An  air  carrier  must  on  request  at  any  time  be  able  to  demonstrate 

to  the  State  responsible  for  the  operating  licence  and  the 

Commission  that  it meets  the  requirements of  this Article. 

(1) OJ  No L 36, 8.2.1991, p. 1 

-  24  -

Where  a Member  State  is not  convinced  that  an  air  carrier  meets  the 

requirements  of  this  Article  it  may  ask  the  Commission  to  verify 

the  situation. 

Article  5 

1. 

An  air  carrier  to  which  an  operating  licence  is  granted  for  the 

f irst  t ime must : 

(a) 

have  a net  start  up  capital  of  at  least  ECU  100  000, 

(b) 

be  able  to  meet  normal  costs  for  a  period  of  three  months 

according  to  its  business  plans  and  taking  into  account  only 

income  secured  by  contract, 

(c) 

be  able  to  demonstrate  to  the  reasonable  satisfaction  of  the 

competent  authorities of  the  licensing  Member  State  that  it  can 

meet  its  actual  and  potential  obligations  for  a  period  of  24 

months,  and 

(d) 

demonstrate  to  the  reasonable  satisfaction  of  the  competent 

authorities  that  its  debt  and  leasing  liabilities  will  be  at 

most  twice  the  size  of  its  equity  capital  at  the  end  of  the 

first  year  of  operation. 

Points  (b), (c) and  (d) shall  not  apply  to air  carriers  which  intend  to 

operate  aircraft  with  less  than  20 seats  and/or  10  tonnes  MTOW. 

2.  (a) 

An  air  carrier  operating  aircraft  with  less  than  20  seats 

and/or 

10  tonnes  MTOW  shall  at  all  times  be  able  to 

demonstrate  that  its net  capital  is at  least  ECU  100  000. 

(4) 

-  25  -

(b) 

Any  other  air  carrier  must  at  all  times  and  in particular  after 

12  months  of  operation  be  able  to  demonstrate  to  the 

reasonable  satisfaction  of  the  licensing  authorities  that  it 

can  meet  its  actual  and  potential  obligations  for  a  period  of 

12 months. 

3. 

For  the  purposes  of  this  Article  an  air  carrier  shall  provide  all 

relevant 

information  and,  in  particular  for  the  purpose  of 

paragraph  2(b),  it  shall,  at  the  beginning  of  each  financial  year 

and  when  substantial  changes  in  operation,  such  as  the  operation 

of  a  new  scheduled  service 

or  a  non-scheduled  service  to  a  new 

region,  have  been  decided,  submit: 

(a) 

audited  accounts  as  soon  as  they  are  available  and  not  later 

than  6  months  after  the  expiry  of  the  financial  year  in 

quest ion, 

(b) 

3-year  business  plans  including  a  1-year  budget, 

(c) 

quarterly  management  accounts, unless  the  licensing  authorities 

require  monthly  accounts,  to  be  provided  no  more  than  4  weeks 

after  the period  to which  they  refer,  and 

(d) 

documentation  concerning  insurance  coverage. 

4. 

The  licensing  authority  shall  review  the  financial  and  economic 

situation  of  any  air  carrier  at  least  every  12 months. 

-  26 

The  value  of  ECU  100  000  referred  to  in paragraphs  1(a)  and  2(a)  is 

based  on  the  EEC  consumer  price  index  at  the  date  of  the  entry  into 

force  of  this  Regulation. 

When  the  price  index  moves  so  that  the 

value  would  increase  or  decrease  by  ECU  10  000  then  the  value 

referred  to  in  paragraphs  1(a)  and  2(a)  shall  be  increased  or 

decreased  accordingly.  In  such  a  case  the  Commission  shall  inform 

the  Member  States  and  publish  the  new  value  in  the  Official  Journal 

of  the  European  Communities. 

Art icle  6 

An  air  carrier  must  be  insured  to  cover  statutory  liability  risks  in 

case  of  accidents,  in  particular  in  respect  of  passengers,  cargo  and 

th i rd  part ies. 

Art icle  7 

A  condition  to  own  aircraft  shall  not  be  required  for  granting  or 

maintaining  a  licence  but  a  Member  State  may  require  the  aircraft  to  be 

used  by  an  air  carrier  to  be  registered  within  the  Community. 

AIR  OPERATOR'S  CERTIFICATE 

Art icle  8 

An  undertaking  which  carries  out  commercial  aviation  activities  must  be 

in  possession  of  an  AOC.  The  AOC  or  an  accompanying  document  shall 

clearly  set  out  the  technical  organisation  and  expertise  required  in 

order  to  ensure  the  safe  operation  of  the  specified  aviation  activities. 

-  27  -

(a)  An  undertaking  shall  not  operate  an  aircraft  for  the  purpose  of 

commercial 

aviation  activities  otherwise  than  under  and  in 

accordance  with  the  terms  and  conditions  of  an  AOC.  Annex  1  sets 

out  the  terms  and  format  of  an  AOC. 

(b)  An  undertaking  shall  allow  the  licensing  authority  to  examine  all 

aspects  of  its  intended  or  actual  operations  connected  with  an  AOC. 

Art icle  9 

1. 

An  AOC  shall  be  issued  or  maintained  only  if  the  licensing 

authority  is  satisfied  that  the  undertaking  can  ensure  safe 

operations,  if  not,  the  AOC  shall  be  varied,  suspended  or  revoked 

as  appropriate.  For  this  purpose  the  undertaking  shall  demonstrate 

to  the  licensing  authority: 

(a) 

the  ability  to maintain  an  adequate  organisation, 

(b) 

an  adequate  method  of  control  and  supervision  of  the  operation, 

including  flight  operations, 

(c) 

the  necessary  training  programmes,  and 

(d) 

adequate  maintenance  arrangements, 

consistent  with  the  nature  and  extent  of  the  operations  specified  and 

as  set  out  in paragraphs  2-10. 

2. 

The  undertaking  shall  have  a  management  organisation  which,  as  a 

whole,  possesses  the  background  and  experience  necessary  for 

exercising  satisfactory  operational  control  and  supervision  of  the 

kind  of  operations  specified  in the  AOC. 

-  28  -

3. 

The  undertaking  shall  have  appointed  post  holders,  acceptable  to 

the  licensing  authority,  who  are  responsible  for,  at  least,  the 

following  functions: 

-  fIight  operat ions, 

-  maintenance  arrangements, 

-  crew  training, 

-  ground  operations. 

4. 

The  undertaking  shall  have  an  operations  manual  and  ail  flights 

shall  be  conducted  in  accordance  with  it.  The  manual  shall  be 

provided  for  approval  to  the  licensing  authority. 

5. 

The  undertaking  shall  arrange  for  ground  handling  facilities,  not 

necessarily  its own,  to ensure  the  safe  handling  of  its  flights. 

6. 

The  undertaking  shall  establish  procedures  for  releasing  its 

fIights. 

7. 

The  undertaking  shall  ensure  that  its aircraft  are equipped  and  its 

crews  qualified  as  required  for  the  area  and  type of  operation. 

8. 

The  undertaking  shall  provide  appropriate  maintenance  arrangements 

for  all  aircraft  operated  under  the  terms of  its AOC. 

9. 

The  undertaking  shall  maintain  accomodation  and  administrative 

support  facilities  at  the  main  operating  base,  appropriate  to  the 

area  and  type of  operation. 

-  29  -

10.  If  the  licensing  authority  is  not  satisfied  with  the  demonstrated 

ability  as  required  under  this  Article,  it  may  require  additional 

demonstration  which  may 

include  the  conduct  of  one  or  more 

demonstration  flights  operated  as  if  these  were 

commercial  air 

transport  fIights. 

Art icle  10 

1. 

The  application  for  the  initial  issue  and  variation  of  an  AOC  shall 

include  the  information  specified  in Annex  2. 

2. 

The  application  shall  be  accompanied  by  the  required  fee,  if  any. 

3. 

The  application  for  a  variation  of  an  AOC  shall  be  submitted  at 

least  30  days,  or,  as  otherwise  agreed,  before  the  date  of  intended 

operat ion. 

4. 

Other  than  in  exceptional  circumstances,  the  undertaking  shall  give 

ten  days  prior  notice  to  the  licensing  authority  of  proposed 

changes  to  appointed  post  holders. 

Article  11 

1. 

An  undertaking  providing  an  aircraft  and  complete  crew  to  an  air 

carrier  and  retaining  the  functions  and  responsibility  for  the 

operation  of  the  aircraft  shall  itself  be  subject  to  the  safety 

requirements  of  this  Regulation. 

2. 

Except  in  cases  under  paragraph  1,  an  air  carrier  utilizing  an 

aircraft  from  or  providing  it  to  another  undertaking  shall  obtain 

prior  approval  for  the  operation  from  the  appropriate  licensing 

authority.  The  conditions  of  the  approval  shall  be  part  of  the 

lease  agreement  between  the  parties. 

-  30  -

GENERAL  PROVISIONS 

Article  12 

1. 

An  operating  licence  and  an  AOC  shall  be  valid  as  long  as  the  air 

carrier 

meets 

the 

obligations 

of 

this 

Regulation. 

That 

notwithstanding,  a Member  State  may  make  provision  for  a  review  one 

year  after  a  new  licence  or  AOC  has  been  issued  and  every  five 

years  thereafter. 

2. 

An  air  carrier  which  ceases  operations  for  any  reason  shall  not 

resume  operations  until  the  licensing  authorities  have  reaffirmed 

the  financial  and  technical  competency. 

3. 

An  operating  licence  or  AOC  which  has  not  been  used  for  6  months 

shall  be  resubmitted  for  approval. 

4. 

In  case  of  a  merger  or  a  takeover  the  relevant  licence  and  AOC 

shall  be  resubmitted  for  approval  in  accordance  with  Article  14. 

The  air  carrier  in question  may  continue  its operations  unless  the 

licensing  authorities  consider  that  safety  is at  risk. 

Art icle  13 

1. 

An  air  carrier  which  does  not  meet  the  requirements  of  this 

Regulation  shall  have  its operational  licence  withdrawn. 

2. 

Notwithstanding  paragraph  1,  a  Member  State  may  grant  a  temporary 

operating  licence  to  an  air  carrier  when  safety  is  not  at  risk  in 

order  to  avoid  a  cessation  of  business  during  a  high  season. 

However,  an  air  carrier  which  has  been  declared  insolvent  shall  not 

be  granted  a  temporary  licence except  in situations  where  realistic 

financial  reorganisation  is  underway. 

-  31  -

Art icle  14 

1. 

Any  application  by  an  undertaking  to  be  granted  an  operating 

licence 

and/or  an  AOC  shall  forthwith  be  made  public  by  the 

Member  State  concerned  and  the  Commission  shall  be  informed. 

2. 

The  Member  State  concerned  shall  take  a  decision  on  the  application 

as  soon  as  possible,  and  not  later  than  one  month  after  all  the 

necessary  information  has  been  submitted,  taking  into  account  all 

available  evidence.  The  decision  shall  be  communicated  to  the 

applicant  undertaking.  A  refusal  shall 

indicate  the  reasons 

therefore. 

3. 

Notwithstanding  paragraph  2,  a  period  of  3  months  shall  elapse 

after  the  day  of  publication  before  any  decision  is  taken  in  order 

to  permit  interested  parties  to  submit  evidence. 

4. 

An  undertaking  whose  application  for  a  licence  has  been  refused  may 

ask  the  Commission  to  review  the  case  with  respect  to  the 

requirements  of  this  Regulation  and  decide  whether  a  licence  should 

have  been  granted. 

Art icle  15 

1. 

In  order  to  carry  out  its  duties  under  this  Regulation  the 

Commission  may  obtain  all  necessary  information  from  the  Member 

States  and  air  carriers  concerned. 

-  32 -

2. 

When  an  air  carrier  does  not  supply  the  information  requested 

within  the  time  limit  fixed  by  the  Commission  or  supplies 

incomplete  information,  the  Commission  shall  by  decision  require 

the  information  to  be  supplied. 

The  decision  shall  specify  what 

information  is  required,  fix  an  appropriate  time  limit  within 

which  it  is to be  supplied  and  indicate  the penalties  provided  for 

in paragraph  4  as  well  as  the  right  to  have  the  decision  reviewed 

by  the Court  of  Justice. 

3. 

At  the  same  time  the  Commission  shall  send  a  copy  of  its  decision 

to  the  competent  authority  of  the Member  State  in the  territory  of 

which  the  registered  office  of  the air  carrier  is situated. 

4. 

The  Commission  may,  by  decision,  impose  fines  on  air  carriers  from 

ECU  1 000  to 50 000 where,  intentionally  or  negligently: 

(a) 

they  supply  incorrect  information  in response  to a  request  made 

pursuant  to paragraph  2 or  do not  supply  information  within  the 

time  Iimit  fixed; 

(b) 

they  produce  the  required  information  in  incomplete  form. 

5. 

Decisions  taken  pursuant  to  paragraph  4  shall  not  be  of  a  penal 

nature. 

6. 

The  Court  of  Justice  shall  have  unlimited  jurisdiction  within  the 

meaning  of  Article  172  of  the  Treaty  to  review  decisions  whereby 

the  Commission  has  imposed  a  fine;  it  may  cancel,  reduce  or 

increase  the  fine. 

(5) 

-  33  -

Art icle  16 

In  addition  to  the  rules  of  this  Regulation  the  air  carrier  must  also 

respect  the  requirements  of  national  corporate  law. 

Article  17 

1. 

The  Commission  shall  publish  a  report  on  the  application  of  this 

Regulation  by  1  January  1994  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  18 

This  Regulation  shall  enter  into  force  on  1  July  1992. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable 

in  alI  Member  States. 

Done  at  Brussels, 

For  the  Council 

The  President 

34 -

ANNEX 1 

TERMS  AND  FORMAT  OF THE AIR  OPERATORS  CERTIFICATE 

An AOC will  indicate  the: 

(1)  Name  and  location of  the  Undertaking; 

(2)  Date of  issue; 

(3)  Description  of  the  type of operations  authorised; 

(4)  Type(s) of  aeroplane  authorised  for  use; 

(5)  Registration  marks  of  the  authorised  aeroplanes  except  that  an 

air  carrier  may  obtain  approval  for  an  alternative  system  to 

inform  the  authority  about  the  aeroplanes  operated  under  its 

AOC; 

(6)  Authorised  areas of  operation-, 

(7)  Names of  post  holders; 

(8)  Special  limitations; 

(9)  Special  authorisations/approvals. 

The  format  of  the AOC  is  in appendix  A. 

-  35 -

APPENDIX  A 

PART 1 
NR  . . . 

National  heading 

AIR OPERATOR  CERTIFICATE 

(Statement  of  Issuing  Authority) 

It  is  hereby  certified  that  following  an  inspection  of  the 
operational  and  technical  provisions,  the  undermentioned  operator  is 
competent  to  conduct  commercial  air  transport  safely  in  accordance 
with  ICAO  Annex  6  part  I  and  (JAROPS  1)  within  the  indicated 
Iimi tat ions. 

Name Operator 

Locat ion Operator 

Type of operat ions 

Type(s) of  aeroplanes 

This  certificate  consists of  three  parts 

date of  issue 

(Place) 

(date) 

(signature) 

(Author ity) 

-  36  -

PART  I I 
Nr 

Registrat ion marks 

Post  Holders 

FIight  operat ions 

Maintenance  arrangements 

Crew  training 

Ground  operat ions 

Area's of  operations 

-  37  -

PART I 
NR  . . . 

Special  I imitât ions 

(VFR  only,  etc) 

Special  authorisations/approvals 

CAT  I I 

CAT  I I I 

MNPS 

ETOPS 

etc  + Carriage  of  dangerous  goods 

38 -

ANNEX  2 

INFORMATION  IN  INITIAL APPLICATION  FOR  AN  AOC 

The  following  information  shall  be  attached  to  the application  for  the 

initial  issue of  an AOC: 

(1)  A description of  the management  organisation; 

(2)  The 

names 

of 

the 

major 

post 

holders, 

including 

those 

responsible  for  flight  operations,  maintenance  arrangements, 

crew 

training 

and 

ground 

operations 

together 

with 

their 

qualifications  and  experience; 

(3)  Maintenance  arrangements; 

(4)  Procedures  for  the  release of  flights; 

(5)  The  operations  manual, 

inclusive  of  the  approval 

of  the 

designated  parts. 

39 -

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

on  access  for  air  carriers  to  intra-Community  air  routes 

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^1), 

Having  regard  to the opinion  of  the European  Par Iiament^2), 

Having  regard  to  the opinion  of  the Economic  and  Social  Committee^3^, 

Whereas  it  is  important  to  establish  an  air  transport  policy  for  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; 

(1) 

(2) 

(3) 

-  40 -

Whereas  Council  Decision  87/602/EEC^1 ) and  Council  Regulation  (EEC)  No 

2343/90^2)  constitute  the  first  steps  in  respect  of  access  for  air 

carriers  to  scheduled  intra-Community  air  routes  to  ensure  the  internal 

market ; 

Whereas  Regulation  (EEC)  No  2343/90  provides  that  the  Council  shall 

decide on  the  revision  of  the Regulation  by  30 June  1992 at  the  latest; 

Whereas  in  Regulation  (EEC)  No  2343/90  the  Council  decided  to  adopt 

rules governing  route  licensing  for  implementation  not  later  than  1 July 

1992; 

Whereas  in  Regulation  (EEC)  No  2343/90  the  Council  decided  to  abolish 

capacity  restrictions  between  Member  States  by  1 January  1993; 

Whereas  in  Regulation  (EEC)  No  2343/90  the  Council  confirmed  that 

cabotage  traffic  rights  are  an  integral  part  of  the  internal  market; 

Whereas  arrangements  for  greater  cooperation  over  the  use  of  Gibraltar 

airport  were  agreed  in London  on  2 December  1987 by  the Kingdom  of  Spain 

and  the  United  Kingdom  in  a  joint  declaration  by  the  Ministers  of 

Foreign  Affairs  of  the  two  countries,  and  such  arrangements  have  yet  to 

come  into operation; 

Whereas  the  development  of  the  air  traffic  system  in  the  Greek  Islands 

and  in  the  Atlantic  Islands  comprising  the  autonomous  region  of  the 

Azores  is at  present  inadequate  and  for  this  reason  airports  situated  on 

these  islands  should  be  temporarily  exempted  from  the  application  of 

this Régulât ion; 

(1) OJ  No L 374, 31.12.1987, p. 19. 

(2) OJ  No L 217, 11.8.1990, p. 8. 

-  41  -

Whereas  it  is  necessary  to  phase  out  restrictions  concerning  multiple 

designation,  fifth-freedom  and  cabotage  rights  in order  to  stimulate  the 

development  of  the  Community  air  transport  sector  and  improve  services 

for  users; 

Whereas  it  is  necessary  to  make  special  provision,  under  limited 

circumstances,  for  public  service  obligations  necessary  for  the 

maintenance  of  adequate  air  services  to national  development  regions; 

Whereas  it  is  necessary  to  make  special  provision  for  new  air  services 

between  regional  airports; 

Whereas  for  air  transport  planning  purposes  it  is  necessary  to  give 

Member  States  the  right  to  establish  non-discriminatory  rules  for  the 

distribution  of  air  traffic  between  airports  within  the  same  airport 

system; 

Whereas  the  exercise  of  traffic  rights  has  to  be  consistent  with  rules 

relating  to  safety,  protection  of  the  environment  and  conditions 

concerning  airport  access  and  has  to  be  treated  without  discrimination 

on  grounds  of  nationality; 

Whereas  taking  into  account  problems  relating  to  airport  infrastructure 

and  navigational  aids  it  is  necessary  to  include  the  possibility  of 

imposing  certain  limitations  concerning  the exercise  of  traffic  rights; 

Whereas,  taking  into account  the  competitive  market  situation,  provision 

should  be  made  to  prevent  unjustifiable  economic  effects  on  air 

carr iers; 

-  42  -

Whereas  it  is necessary  to  specify  the  duties  of  Member  States  and  air 

carriers  for  the  purpose  of  providing  necessary  information; 

Whereas  it  is appropriate  to ensure  identical  assessment  and  evaluation 

of market  access  for  the same  types of  air  services; 

Whereas  it  is  appropriate  to  deal  with  all  matters  of  market  access  in 

the same Council  regulation; 

Whereas  any  possibility  for  an  air  carrier  from  a  third  country  to 

exercise  traffic  rights  between  Community  airports  shall  be  settled  in 

an  agreement  between  the  third  country  concerned  and  the  Community; 

Whereas  this  Regulation  partially  replaces  Regulation  (EEC)  No  2343/90 
and  Council  Regulation  (EEC) No  294/91<1>, 

HAS ADOPTED  THIS  REGULATION: 

Article 1 

1. 

This  Regulation  concerns  access  to  routes  between  airports  within 

the  Community  for  scheduled  and  non-scheduled  air  services. 

(1) OJ  No L  36, 8.2.1991,  p.  1. 

-  43  -

2. 

The  application  of  this  Regulation  to  the  airport  of  Gibraltar  is 

understood  to  be  without  prejudice  to  the  respective  legal 

positions  of  the  Kingdom  of  Spain  and  the  United  Kingdom  with 

regard  to  the  dispute  over  sovereignty  over  the  territory  in which 

the  airport  is  situated. 

3. 

Application  of  the  provisions  of  this  Regulation  to  Gibraltar 

airport  shall  be  suspended  until  the  arrangements  in  the  joint 

declaration  made  by  the  Foreign  Ministers  of  the  Kingdom  of  Spain 

and  the  United  Kingdom  on  2  December  1987  have  come  into 

operation.  The  Governments  of  Spain  and  the  United  Kingdom  will  so 

inform  the  Council  of  that  date. 

4. 

Airports  in  the  Greek  islands  and  in  the  Atlantic 

islands 

comprising  the  autonomous  region  of  the  Azores  shall  be  exempted 

from  the  application  of  this  Regulation  until  30  June  1993. 

Unless  otherwise  decided  by  the  Council,  on  a  proposal  of  the 

Commission,  this  exemption  shall  apply  for  a  further  period  of  five 

years  and  may  be  continued  for  five  years  thereafter. 

Art icle  2 

For  the  purposes  of  this  Regulation: 

(a)  "air  carrier"  means  an  air  transport  undertaking  with  a  valid 

operat ing  Iicence; 

(b)  "Community  air  carrier"  means  an  air  carrier  with  a valid  operating 

licence  issued  by  a  Member  State  in  accordance  with  Council 

Regulation  (EEC) 

(1) [on  licensing  of  air  carriers); 

(1) OJ  No L 

-  44 -

(c)  "air  service"  means  a  flight  or  a  series  of  flights  carrying 

passengers,  cargo  and/or  mail  for  remuneration  and/or  hire; 

(d)  "scheduled  air  service"  means  a  series  of  flights  possessing  all 

the  following  characteristics: 

(i)  it  is  performed  by  aircraft  for  the  transport  of  passengers, 

cargo  and/or  mail  for  remuneration,  in  such  a  manner  that  on 

each  flight  seats  are  available  for  individual  purchase  by 

members  of  the  public  (either  directly  from  the  air  carrier  or 

from  its authorised  agents); 

(ii)  it  is  operated  so  as  to  serve  traffic  between  the  same  two  or 

more  points,  either: 

1. 

according  to  published  timetable; or 

2. 

with  flights  so  regular  or  frequent  that  they  constitute  a 

recognisably  systematic  series; 

(e)  "flight"  means  a  departure  from  a  specified  airport  towards  a 

specified  destination  airport; 

(f)  "traffic  right"  means  the  right  of  an  air  carrier  to  carry 

passengers,  cargo  and/or  mail  on  an  air  service  between  two 

Community  airports; 

(g)  "seat-only  sales"  means  the  sale  of  seats,  without  any  other 

service  bundled  such  as  accommodation,  directly  to  the  public  by 

the  air  carrier  or  its authorised  agent; 

-  45  -

(h)  "Member  State(s)  concerned"  means  the  Member  State(s)  between  or 

within  which  an  air  service  is operated; 

(i)  "State of  registration" means  the Member  State  in which  the  licence 

mentioned  in paragraph  (b)  is  issued; 

(J)  "regional  airport"  means  any  airport  other  than  one  listed  in  the 

Annex  as  a category  1 airport; 

(k)  "airport  system"  means  two  or  more  airports  grouped  together  as 

serving  the  same  city,  as  indicated  in the  Annex; 

(I)  capacity  shall  be  expressed  as  the  number  of  seats  offered  to  the 

general  public  on  a scheduled  air  service  over  a given  period; 

(m)  "public  service  obligation"  means  any  obligation  imposed  upon  an 

aircarrier  to  take,  in respect  of  any  route which  it  is  licensed  to 

operate  by  a  Member  State,  all  necessary  measures  to  ensure  the 

provision  of' a  service  satisfying  fixed  standards  of  continuity, 

regularity  and  capacity  which  standards  the  air  carrier  would  not 

assume  if  it were  solely  considering  its economic  interest. 

Article  3 

Subject  to  this  Regulation,  Community  air  carriers  shall  be  permitted  by 

the  State(s)  concerned  to  exercise  traffic  rights  between  airports  or 

airport  systems  within  the  Community  when  they  are  open  for  civil  air 

services. 

-  46  -

Art icle  4 

(a) A  Member  State,  following  consultations  with  other  States 

concerned  and  after  having  informed  the  Commission, may  impose 

a  public  service  obligation  in  respect  of  scheduled  air 

services  to  a  regional  airport  in  its  territory  on  a  route 

which  is considered  vital  for  the economic  development  of 

the 

region  in which  the  airport  is  located,  to  the  extent  necessary 

to ensure  on  that  route  the  adequate  provision  of  scheduled  air 

services  satisfying  fixed  standards  of  continuity,  regularity, 

capacity  and  pricing  and  which  standards  air  carriers would  not 

assume  if  they  were  solely  considering  their  commercial 

interest. 

(b) The  adequacy  of  scheduled  air  services  shall  be  assessed  by  the 

Member  States  having  regard  to: 

(i) 

the  public  interest; 

(ii) 

the  possibility  of  having  recourse  to  other  forms  of 

transport  and  the  ability  of  such  forms  to  meet  the 

transport  needs  under  consideration; 

(iii) 

the  air  fares  and  conditions which  can  be  quoted  to  users; 

(iv) 

the  combined  effect  of  all  air  carriers  operating  or 

intending  to operate  on  the  route. 

47  -

(c)  If  no  air  carrier  has  commenced  or  is  about  to  commence 

scheduled  air  services  on  a  route  for  which  a  public  service 

obligation  has  been  imposed  then  the  Member  State  may  limit 

access  ta  that  route  to  only  one  air  carrier  for  a  period  of 

up  to  three  years.  The  right  to  operate  the  service  shall  be 

offered  by  public  tender  to any  Community  air  carrier  entitled 

to  operate  such  air  services.  The 

tender  shall  be  published 

in  the  Official  Journal  of  the  European  Communities  and  the 

date  of  submission  for  proposals  cannot  be  earlier  than  one 

month  after  the  day of  publication. The  submissions  made  by  air 

carriers  shall  forthwith  be  communicated  to  other  States 

concerned  and  to the  Commission. 

(d) The  selection  among  the  submissions  shall  be  made  as  soon  as 

possible  taking  into  consideration  the  quality  of  service 

offered  and  in  particular  the  air  fares  and  conditions  which 

can  be  quoted  to users. 

(e) Notwithstanding  subparagraph  (d), a  period  of  two  months  shall 

elapse  after  the day  of  submission  before  any  selection  is made 

in order  to permit  other  Member  States  to submit  comments. 

(f) The  Member  States  shall  take  the  measures  necessary  to  ensure 

that  any  decision  taken  under  the  provisions  of  this  Article 

may  be  reviewed  effectively  and,  in  particular,  as  soon  as 

possible  on  the  grounds  that  such  decisions  have  infringed 

Community  law or  national  rules  implementing  that  law. 

-  48 -

(g) When  a public service obligation  has been  imposed  in accordance 

with  subparagraph  (a) then air  carriers  shall  be able  to offer 

seat-only  sales  only  if  the  air  service  in  question  meets  all 

the  requirements  of  the public  service obligation.  Consequently 

that  air  service  shall  be  considered  as  a  scheduled  air 

service. 

(h) Subparagraph  (c)  shall  not  apply  in  any  case  in which  another 

Member  State  concerned  proposes  a  satisfactory  alternative 

means of  fulfilling  the same  public  service  obligation. 

2. 

Notwithstanding  Article  3,  a  Member  State,  in  a  case  where  one  of 

the  air  carriers  licensed  by  it has  started  to operate  a  scheduled 

passenger  air  service  on  a  new  route  between  regional  airports 

with  aircraft  of  no more  than  80  seats, may  refuse  a scheduled  air 

service  by  another  air  carrier  for  a period  of  two years, unless  it 

is  operated  with  aircraft  of  no  more  than  80  seats,  or  it  is 

operated  in  such  a  way  that  not  more  than  80  seats  are  available 

for  sale between  the  two  airports  in question, on each  flight. 

3. 

Paragraphs  1(c)  and  2  shall  not  apply  to  routes  when  the  capacity 

offered  exceeds  30 000 seats  per  year. 

4. 

At  the  request  of  a Member  State  with  a  legitimate  interest  which 

considers  that  the  development  of  a  route  is  being  unduly 

restricted  by  the  terms  of  paragraphs  1  or  2,  or  on  its  own 

initiative  or  where 

disagreement  arises  regarding  the  application 

of  paragraph  2,  the 

Commission  shall  carry  out  an  investigation 

and  within  two  months  of 

receipt  of  the  request  shall  take  a 

decision  on  the  basis  of  all 

relevant  factors  on  whether 

paragraph  1 or  2  shall  continue  to  apply  in  respect  of  the  route 

concerned. 

-  49  -

The  Commission  shall  communicate  its  decision  to  the  Council  and  to 

the  Member  States.  Any  Member  State  may  refer  the  Commission's 

decision  to  the  Council  within  a  time  limit  of  one  month.  The 

Council,  acting  by  a  qualified  majority,  may 

in  exceptional 

circumstances  take  a  different  decision  within  a  period  of  one 

month. 

Art icle  5 

In operating  air  services,  a  Community  air  carrier  shall  be  permitted  by 

the  State(s)  concerned  to  combine  air  services  and  use  the  same  flight 

number. 

Art icle  6 

This  Regulation  shall  not  affect  a  Member  State's  right  to  regulate 

without  discrimination  on  grounds  of  nationality  or  identity  of  the  air 

carrier,  the  distribution  of  traffic  between  the  airports  within  an 

airport  system. 

Art icle  7 

1. 

The  exercise  of  traffic  rights  is  subject  to  published  Community, 

national, 

regional 

or 

local 

rules 

relating 

to  safety, 

the 

protection  of  the  environment  and  the  allocation  of  slots,  and  to 

the  following 

conditions: 

-  50  -

(a)  the  airport  or  airport  system  concerned  must  have  sufficient 

facilities  to  accommodate  the  air  service; 

(b)  navigational  aids  must  be  sufficient  to  accommodate  the  air 

service. 

2. 

When  the  conditions  in paragraph  1 are  not  met,  a Member  State  may, 

without  discrimination  on  grounds  of  nationality  or  identity  of  the 

air  carrier,  impose  conditions  on,  limit  or  refuse  the  exercise  of 

those  traffic  rights.  Before  taking  such  a measure,  a  Member  State 

shall  inform  the  Commission  and  provide  it  with  all  the  necessary 

elements  of  information. 

3. 

At  the  request  of  a  Member  State  or  on  its  own  initiative  the 

Commission  shall  examine  the  application  of  paragraph  2  in  any 

particular  case  and 

within  one  month  of  the  date  of  receipt  of 

the  request  decide  whether  the  Member  State  may  continue  to  apply 

the  measure. 

4. 

The  Commission  shall  communicate  its  decision  to  the  Council  and  to 

the  Member  States.  Any  Member  State  may  refer  the  Commission's 

decision  to  the  Council  within  a  time  limit  of  one  month.  The 

Council,  acting  by  a  qualified  majority,  may  in  exceptional 

circumstances  take  a  different  decision  within  a  period  of  one 

month. 

Art icle  8 

1. 

Capacity  limitations  shall  not  apply  to  air  services  covered  by 

this  Regulation  except  as  set  out  in  Articles  6  and  7  and  in  this 

Art icle. 

-  51  -

2. 

At  the  request  of  any  Member  State  for  which  the  application  of 

paragraph  1  has  led  to  serious  financial  damage  for  the  scheduled 

air  carrier(s)  licensed  by  that  Member  State,  the  Commission  shall 

carry  out  a  review  and,  on  the  basis  of  all  relevant  factors, 

including 

the  market  situation  and 

in  particular  whether  a 

situation  exists  whereby  the 

opportunities  of  air  carriers  of 

that  Member  State  to  effectively  compete  in  the  market  are  unduly 

affected,  the  financial  position  of  the 

air  carrier(s)  concerned 

and  the  capacity  utilisation  achieved,  shall 

take  a  decision  on 

whether  the  capacity  for  scheduled  air  services  to  and  from  that 

State  should  be  stabilized  for  a  limited  period. 

3. 

The  Commission  shall  communicate  its  decision  to  the  Council  and  to 

the  Member  States.  Any  Member  State  may  refer  the  Commission's 

decision  to  the  Council  within  a  time  limit  of  one  month.  The 

Council,  acting  by  a 

qualified  majority,  may  in  exceptional 

circumstances  take  a  different  decision  within  a  period  of  one 

month. 

Art icle  9 

The  periods  referred  to  in Articles  4 ( 4 ), 7(3)  and  8(2)  shall  only  start 

to  run  when  all  necessary  information  has  been  made  available. 

-  52 

Art icle  10 

1. 

In  order  to  carry  out  its  duties  under  this  Regulation  the 

Commission  may  obtain  all  necessary  information  from  the  Member 

States  and  air  carriers  concerned. 

2. 

When  an  air  carrier  does  not  supply  the  information  requested 

within  the  time  limit  fixed  by  the  Commission  or  supplies 

incomplete  information,  the  Commission  shall  by  decision  require 

the  information  to  be  supplied. 

The  decision  shall  specify  what 

information  is  required,  fix  an 

appropriate  time  limit  within 

which  it  is to be  supplied  and  indicate  the  penalties  provided  for 

in paragraph  4  as  well  as  the  right  to  have  the  decision  reviewed 

by  the Court  of  Justice. 

3. 

At  the  same  time  the  Commission  shall  send  a  copy  of  its  decision 

to  the  competent  authority  of  the Member  State  in  the  territory  of 

which  the  registered  office  of  the air  carrier  is  situated. 

4. 

The  Commission  may,  by  decision,  impose  fines on  air  carriers  from 

ECU  1 000  to 50 000 where,  intentionally  or  negligently: 

(a) they  supply  incorrect  information  in response  to a  request  made 

pursuant  to paragraph  2 or  do not  supply  information  within  the 

t ime  Iimit  f ixed; 

(b) they  produce  the  required  information  in  incomplete  form. 

5. 

Decisions  taken  pursuant  to  paragraph  4  shall  not  be  of  a  penal 

nature. 

-  53  -

6. 

The  Court  of  Justice  shall  have  unlimited  jurisdiction  within  the 

meaning  of  Article  172  of  the  Treaty  to  review  decisions  whereby 

the 

Commission  has  imposed  a  fine;  it  may  cancel,  reduce  or 

increase  the 

fine. 

Article  11 

1. 

The  Commission  shall  publish  a  report  on  the  application  of  this 

Regulation  by  1  January  1994  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  12 

Regulations  (EEC)  Nos  2343/90  and  294/91  are  hereby  revoked  with  the 

exceptions  of  point  (e) of  Article  2  and  Annex  I of  Regulation  (EEC)  No 

2343/90,  and  of  point  (b) of  Article  2  and  the  Annex  of  Regulation  (EEC) 

No  294/91. 

Art icle  13 

This  Regulation  shall  enter  into  force  on  1  January  1993. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable 

in  alI  Member  States. 

Done  at  Brussels, 

For  the  Council 

The  President 

-  54  -

ANNEX 

LIST  OF  GATEGORY  1  AIRPORTS 

BELGIUM  : 

BrusseIs-Zaventem 

DENMARK  : 

Copenhagen-Kastrup/RoskiI de 

FEDERAL  REPUBLIC  OF  GERMANY 

Frankfurt-Rhein-Ma in 

SPAIN  : 

GREECE 

DUsseI dor f-Lohausen 

Munich 

Palma-Mallorca 

Madr id-BaraJas 

Malaga 

Las  Palmas 

Athens-He I I in ikon 

Salonica-Micra 

FRANCE 

Paris-Charles  De  Gaulle/Orly 

IRELAND  : 

Dub I in 

ITALY  : 

Rome-F i urn i c i no/C i amp i no 

M iIan-L i nate/MaI pensa 

THE  NETHERLANDS  : 

Amsterdam-Sch i pho 

PORTUGAL  : 

UNITED  KINGDOM 

L i sbon 

Faro 

London-

Heat hrow/Gatwick/S tans ted 

Luton 

-  55 -

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

on  fares and  rates  for  air  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^1), 

Having  regard  to  the opinion  of  the  European  Par Iiament^2), 

Having  regard  to the opinion of  the Economic  and  Social  Committee^3), 

Whereas  it  is  important  to  establish  an  air  transport  policy  for  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; 

(1) 

(2) 

(3) 

-  56  -

Whereas  Council  Directive  87/601/EEC<1)  and  Council  Regulation  (EEC)  No 
2342/90(2)  constitute  the  first  steps  in  respect  of  air  fares  to  ensure 

the  internal  market; 

Whereas  in Regulation  (EEC) No  2342/90  the  Council  decided  to  introduce 

a system  of  double  disapproval  for  all  air  fares by  1 January  1993; 

Whereas  air  fares  normally  should  be  determined  freely  by  market  forces 

where  competition  exists; 

Whereas  until  the  free  access  to  the  market  takes  full  effect  it  is 

necessary  to provide  for  a  transitional  period; 

Whereas  it  is  necessary  to  establish  clear  criteria  for  the  assessment 

of  air  fares-, 

Whereas  it  is appropriate  to  ensure  identical  assessment  and  evaluation 

of  air  fares  for  the  same  types of  air  services; 

Whereas  in situations  where  competition  is  limited  it  is appropriate  to 

provide  for  a  transparent  and  objective  procedure  according  to  which 

Member  States  may  ask  the  Commission  to examine  and  decide  on  whether  a 

proposed  air  fare  conforms with  the  criteria  laid  down; 

Whereas  it  is  necessary  to  specify  the  duties  of  Member  States  and  air 

carriers  for  the  purpose of  providing  necessary  information; 

Whereas  it  is  appropriate  to  deal  with  all  matters  of  pricing  in  the 

same Council  Regulation; 

(1) OJ  No  L  374, 31.12.1987, p. 12. 

(2) OJ  No  L  217, 11.8.1990, p.  1. 

-  57  -

Whereas  possibilities  for  third  country  air  carriers  to  charge  air  fares 

on  routes  within  the  Community  should  be  settled  in an  agreement  between 

the  Community  and  the  third  country  concerned;  whereas  in  order  for 

third  country  air  carriers  to  participate  normally  in  the  market  they 

should  be  able  to  charge  the  normal  economy  fare  or  its  equivalent; 

Whereas  this  Regulation  replaces  Regulation  (EEC)  No  2342/90  and 
partially  replaces  Council  Regulation  (EEC)  No  294/91(1), 

HAS  ADOPTED  THIS  REGULATION: 

Article 1 

This  Regulation  shall  apply  to  the  criteria  and  procedures  to  be  applied 

for  the  establishment  of  air  fares  and  rates  charged  by  air  carriers  on 

air  services  within  the  Community. 

Art icle  2 

For  the  purposes  of  this  Regulation: 

(a)  "air  fares"  means  the  prices  to  be  paid  in  ECU  for  the  carriage  of 

passengers  and  baggage  on  air  services  and  the  conditions  under 

which  those  prices  apply,  including  remuneration  and  conditions 

offered  to  agency  and  other  auxiliary  services; 

(1) OJ  No  L  36, 8.2.1991,  p.1. 

-  58  -

(b)  "rates"  means  the  prices  to  be  paid  in ECU  for  the  carriage  of  air 

cargo  and/or  mail  on  air  services  and  the  conditions  under  which 

those  prices  apply,  including  remuneration  and 

conditions  offered 

to  agency  and  other  auxiliary  services; 

(c)  "standard  rates"  means  the  rates  which  the  air  carrier  would 

normally  quote  including  the  availability  of  normal  discounts; 

(d)  "seat-only  sales"  means  the  sale  of  seats,  without  any  other 

service 

bundled  such  as  accomodation,  directly  to  the  public  by 

the  air  carrier  or  its  authorised  agent; 

(e)  "air  service"  means  a  flight  or  a  series  of  flights  carrying 

passengers,  cargo  and/or  mail  for  remuneration  and/or  hire; 

(f)  "scheduled  air  service"  means  a  series  of  flights  possessing  all 

the 

following  characteristics: 

(i)  it 

is  performed  by  aircraft 

for 

the  transport 

of 

passengers,  cargo  and/or  mail  for  remuneration,  in  such  a 

manner  that  on  each  flight  seats  are  available  for 

individual  purchase  by  members  of  the  public  (either 

directly  from  the  air  carrier  or  from  its  authorised 

agents) ; 

(ii)  it  is operated  so  as  to  serve  traffic  between  the  same  two 

or  more  points,  either: 

1.  according  to published  timetable;  or 

2. with fl ights so regular or frequent  that they const i tute 

a  recognisably  systematic  series; 

-  59  -

(g)  "flight"  means  a  departure  from  a  specified  airport  towards  a 

specified  destination  airport; 

(h)  "air  carrier"  means  an  air  transport  enterprise  with  a  valid 

operating  license; 

(i)  "Community  air  carrier" means  an  air  carrier  with  a valid  operating 

license  issued  by  a  Member  State  in  accordance  with  Council 

Regulation  (EEC) No 

C)  [on  licensing  of  air  carriers]; 

(J)  "Member  State(s)  concerned"  means  the  Member  State(s)  between  or 

within  which  an  air  service  is operated; 

(k)  "reference  fare"  means  the  lowest  one  way  or  return,  as 

appropriate,  fully  flexible  fare  charged  by  a Community  air  carrier 

on  the  route  in  question;  if  more  than  one  such  fare  exists,  the 

arithmetic  average  of  all  such  fares  shall  be  taken,  taking  into 

account  the  number  of  seats  offered  at  the  fare  by  each  Community 

air  carrier  on  the  route. 

Art icle 3 

(a) Member  States  shall  not  disapprove  air  fares  and  rates  of 

Community  air  carriers  if  they  are  reasonably  related  to  the 

applicant  air  carrier's  long-term  fully-allocated  relevant 

costs,  while  taking  into  account  the  need  for  a  satisfactory 

return  on  capital  and  for  an  adequate  cost  margin  to  ensure  a 

satisfactory  safety  standard. 

(1) OJ  No L 

-  60 

(b)  In  disapproving  air  fares  pursuant  to  subparagraph  (a), Member 

States  shall  also  take  into account  other  relevant  factors,  the 

needs  of  consumers  and  the  competitive  market  situation, 

including  the  fares  of  other  air  carriers  operating  on  the 

route  and  the need  to prevent  dumping. 

(c) The  fact  that  a proposed  air  fare  is  lower  than  that  offered  by 

another  Community  air  carrier  operating  on  the  route  shall  not 

be  sufficient  reason  for  withholding  approval. 

2. 

Air  carriers  shall  not  charge  air  fares  or  rates  that  are,  in 

relation  to  the  criteria  defined  in  paragraph  1(a)  and  (b), 

excessively  high  to  the  disadvantage  of  users or  unjustifiably  low 

in view of  the competitive  market  situation. 

3. 

Only  Community  air  carriers  shall  be  entitled  to  introduce  lower 

fares  than  the existing ones. 

Art icle 4 

1. 

Air  fares  offered  to  tour  operators  or  offered  to  the  public 

specifically  combined  with  accomodation  arrangements  for  the 

duration  of  the  trip  and  air  fares  for  groups  larger  than  6  persons 

shall  be  approved  automatically. 

61 -

2. 

Air  fares  referred  to  in  paragraph  1  shall  be  communicated  to  the 

authorities  at  the  latest  the  day  before  the  flight. 

3. 

Seat-only  air  fares on  non-scheduled  air  services  are  to  be  treated 

in accordance  with  Articles  3, 6 and  7. 

Art icle 5 

1. 

Rates  charged  by  Community  air  carriers  shall  be  set  by  free 

agreement  between  the  parties  to  the  contract  of  carriage. 

2. 

Air  carriers  operating  within  the Community  shall  make  available  on 

request  all  standard  rates  to  the general  public. 

Art icle  6 

1. 

An  air  carrier  shall  submit  its  proposed  air  fares  for  scheduled 

air  services  in the  form  prescribed  by  the Member  States  concerned. 

2. 

Aeronautical  authorities  shall  not  require  air  carriers  to  submit 

air  fares  in  respect  of  scheduled  air  services  more  than  45  days 

before  they  come  into  effect. 

3. 

An  air  fare  for  a  scheduled  air  service  shall  be  considered  as 

approved  unless,  within  30  days  of  the  day  of  submission,  the 

Member  State(s) concerned  has(have) notified  its(their)  disapproval 

-  62  -

to  the  applicant  air  carrier  and  to  any  other  Member  State 

concerned,  stating  its(their)  reasons  or  unless  the  procedure  in 

Article  7  has  been  initiated. 

At  the  request  of  either  Member 

State,  consultations  shall 

take  place  between 

the  States 

concerned  within  the  30-day  period. 

4. 

On  the  basis  of  the  experience  acquired  since  the  entry  into  force 

of  this  Regulation  and  after  consultation  with  the  Member  States 

the  Commission  may,  when  submitting  on  1  January  1996  the  report 

provided  for  in  Article  11,  decide  that  air  fares  which  are  not 

covered  by  Article  7  shall  be  approved  automatically. 

5. 

A  Member  State  may  refer  the  Commission's  decision  to  the  Council 

within  a  time  limit  of  one  month.  The  Council  acting  by  qualified 

majority  may  in exceptional  circumstances  take  a  different  decision 

within  a  period  of  two  months. 

6. 

A Member  State  shall  permit  a Community  air  carrier  to match  an  air 

fare  already  approved  for  a  scheduled  air  service  between  the  same 

city-pair  on  the  basis  that  this  provision  shall  not  apply  to 

indirect  air  services  which  exceed  the  length  of  the  shortest 

direct  service,  measured  by  the  normal  flight  routing,  by  more  than 

40%.  Member  States  may  also  permit  a  Community  air  carrier 

operating  a  direct  scheduled  air 

service  to  match  prices  already 

accepted  or  published  for  a  non-scheduled  air  service  operated  on 

the  same  route  provided  that  both  products  are  equivalent  in  terms 

of  quality  and  conditions. 

7. 

Member  States  concerned  may  not  limit  their  approval  to  less  than  a 

season  unless  requested  by  the  applicant  air  carrier. 

-  63 

8. 

An  air  fare  for  a  scheduled  air  service,  once  approved,  shall 

remain  in  force  until  it  expires  or  is  replaced.  It  may,  however, 

subject  to  Article  3 ( 1 ), be  prolonged  by  the  air  carrier  concerned 

after  its  original 

date  of  expiry  for  a  period  not  exceeding  12 

months. 

Art icle  7 

1. 

A  Member  State  concerned  may,  for  a  scheduled  air  service  on  a 

route  where  competition  is  limited,  request  the  Commission  to 

examine  whether  an  air  fare,  which  is  not  covered  by  the  Annex, 

complies  with  Article  3(1). 

The  Member  State  shall  at  the  same 

time  inform  the  other  Member  State(s)  concerned  and  the  air 

carrier  concerned.  The  Commission  shall  forthwith 

publish  in  the 

Official  Journal  of  the  European  Communities  that  the  air  fares 

have  been  submitted  for  examination. 

2. 

For  the  purposes  of  this  Regulation  limited  competition  is  said  to 

ex ist  on  a  route: 

where  significant  barriers  to  market  entry  are  in  force,  e.g. 

at  coordinated  airports,  and  where  there  are  not  at  least  three 

air  carriers  with  pricing  freedom  exercising  traffic  rights, 

each  at  least  once  per  day,  between  the  airports  concerned,  or 

where  public  service  obligations  exist,  or 

where  at  most  30  000  seats  offered  for  sale  yearly  by  only  one 

air  carrier  or  two  air  carriers  under  a  joint  operation 

agreement. 

-  64  -

3. 

An  air  fare  which  has  been  submitted  for  examination  in  accordance 

with  paragraph  1  within  21  days  of  its  submission  to  the 

aeronautical author ities  concerned  shall  not,  unless  the  Commission 

within  21  days  decides  otherwise,  enter  into  force  during  the 

examination  by  the  Commission. 

4. 

The  Commission  shall  give  a  decision  on  whether  the  air  fare 

complies  with  Article  3(1) as  soon  as  possible  and  in any  event  not 

later  than  two  months  after  having  received  sufficient  information 

from  the  air  carrier  concerned.  The  Commission  shall  take  into 

account  all  information  received  from  interested  parties. 

5. 

Notwithstanding  paragraph  1,  the  Commission  may  on  its  own 

initiative  investigate  whether  an  air  fare  conforms  to  the 

provisions  of  this  Regulation. 

6. 

The  Commission  shall  communicate  its  decision  to  the  Member  States 

concerned  and  to  the  air  carrier  concerned. 

7. 

A Member  State  concerned  may  refer  the  Commission's  decision  to  the 

Council  within  a  time  limit  of  one  month.  The  Council  acting  by 

qualified  majority  may 

in  exceptional 

circumstances  take  a 

different  decision  within  a period  of  one  month. 

Art icle  8 

At  least  once  a  year  the  Commission  shall  consult  on  air  fares  for 

scheduled  air  fares  and  related  matters  with  representatives  of  air 

transport  user  organisations  in  the  Community,  for  which  purpose  the 

Commission  shall  supply  appropriate  information  to  participants. 

-  65  -

Art icle  9 

Air  carriers  from  third  countries  with  traffic  rights  between  Community 

airports  shall  be  able  to  match  the  normal  economy  air  fare  or  its 

closest  equivalent  unless  otherwise  provided  for  in an  agreement  between 

the  Community  and  a  third  country. 

Art icle  10 

1. 

In  order  to  carry  out  its  duties  under  this  Regulation  the 

Commission  may  obtain  all  necessary  information  from  the  Member 

States  and  air  carriers  concerned. 

2. 

When  an  air  carrier  does  not  supply  the  information  requested 

within  the  time  limit  fixed  by  the  Commission  or  supplies 

incomplete  information,  the  Commission  shall  by  decision  require 

the  information  to  be  supplied. 

The  decision  shall  specify  what 

information  is  required,  fix  an 

appropriate  time  limit  within 

which  it  is  to  be  supplied  and  indicate 

the  penalties  provided 

for  in  paragraph  4  as  well  as  the  right  to  have  the  decision 

reviewed  by  the  Court  of  Justice. 

3. 

At  the  same  time  the  Commission  shall  send  a  copy  of  its  decision 

to  the  competent  authority  of  the  Member  State  in  the  territory  of 

which  the  registered  office  of  the  air  carrier  is  situated. 

- 66 -

4.  The Commission may,  by decision, impose fines on air carriers from 

ECU 1 000 to 50 000 where, intentionally or negligently: 

(a) they supply  incorrect  information  in response to a request made 

pursuant to paragraph 2 or do not supply  information within the 

t ime  Iimit fixed; 

(b) they produce the required  information in incomplete form. 

5.  The Commission may, by decision,  impose fines on air  carriers for 

infringements  of  this  Regulation  up  to  a  maximum  of  10% of  the 

annual  turnover  for  the  relevant  activity  of  the  air  carrier 

concerned. 

In fixing  the amount of  the fine, regard shall  be had both  to the 

seriousness and to the duration of the infringement. 

6.  Decisions  taken pursuant  to paragraphs  4 and  5 shall  not  be of a 

penal nature. 

7.  The Court  of  Justice shall  have unlimited  jurisdiction  within the 

meaning  of  Article  172 of  the Treaty  to  review  decisions whereby 

the  Commission  has  imposed  a  fine;  it  may  cancel,  reduce  or 

increase the fine. 

Article 11 

1.  The  Commission  shall  publish  a  report  on  the  application  of  this 

Regulation by 1 January  1994 and every second year thereafter. 

- 67 -

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. 

Art icie 12 

Regulation  (EEC) No  2342/90  is hereby  revoked. 

Art icle 13 

This Regulation  shall  enter  into force on  1 January  1993. 

This Regulation  shall  be binding  in  its entirety  and  directly  applicable 

in alI  Member  States. 

Done  at Brussels, 

For  the Council 

The  President 

-  68  -

ANNEX 

The  Commission  shall  not  be  obliged  to  investigate  air  fares  for  which 

any of  the  following  conditions  apply: 

Minimum  stay  of  at  least  six  days; 

Sunday  rule; 

Reservation  for  the  entire  trip,  ticketing  and  payment  to 

be  made  at  the  same  time,  except  that  reservation  for  the 

return  trip  may  be  made  at  a  later  time;  cancellation  only 

permissible  prior  to  departure  of  outbound  travel  and  at  a 

fee  of  at  least  20%  of  the  price  of  the  ticket;  change  of 

reservation  only  permissible  at  a fee; 

Passenger  to  be  aged  not  more  than  25  years  or  not  less 

than  60  years  or  father  and/or  mother  with  children  aged 

not  more  than  25  years  travelling  together  (minimum  three 

persons); 

specific  combination  with  accommodation  for  the  duration  of 

the  trip-, 

off-peak; 

Any  equivalent  or  more  stringent  condition. 

-  69 

ISSN 0254-1475 

COM(91) 275 final 

DOCUMENTS 

EN 

07 

Catalogue number : CB-CO-91-370-EN-C 

ISBN 92-77-75316-1 

Office for Official Publications of the European Communities 

L-2985 Luxembourg