Notice pursuant to Article 5 of Council Regulation (EEC) No 3976/87 of  14 December 1987  on the application of Article 81(3) of the EC Treaty to certain categories of agreements, decisions and concerted practices in the air transport sector   (Text with EEA relevance)
Date: 2006-02-18
Institutions: European Commission
Subjects: air freight rate, air transport, carriage of passengers, international transport, intra-EU transport, transport regulations

18.2.2006

EN

Official Journal of the European Union

C 42/15

Notice pursuant to Article 5 of Council Regulation (EEC) No 3976/87 of 14 December 1987 on the
application of Article 81(3) of the EC Treaty to certain categories of agreements, decisions and
concerted practices in the air transport sector

(2006/C 42/05)

(Text with EEA relevance)

In accordance with Article 5 of Council Regulation (EEC) No 3976/87, the Commission invites interested
parties to send their comments concerning the attached draft Commission Regulation (EC) on the applica-
tion of Article 81(3) of the EC Treaty to categories of agreements in the field air transport, within one
month of the date of publication of this notice, to:

European Commission
Directorate-General for Competition
Unit D2, Office J70 2/55
Rue de la Loi/Wetstraat 200
B-1049 Brussels
fax: (32-2) 295 01 28
e-mail: comp-revision-1617-93@cec.eu.int

Commission Regulation on the application of Article 81(3) of the Treaty to certain categories of
agreements and concerted practices concerning consultations on passenger tariffs on scheduled air
services and slot allocation at airports

Draft

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Com-
munity,

Having regard to Council Regulation (EEC) No 3976/87 of 14
December 1987 on the application of Article 85 (3) of the
Treaty to certain categories of agreements and concerted prac-
tices in the air transport sector (1), and in particular Article 2
thereof,

Having published a draft of this Regulation,

After consulting the Advisory Committee on Restrictive Prac-
tices and Dominant Positions,

Whereas:

(1)

(2)

Since 1 May 2004, the air transport sector has been
subject to the generally applicable provisions of Council
Regulation (EC) No 1/2003 of 16 December 2002 on
the implementation of the rules on competition laid
down in Articles 81 and 82 of the Treaty (2).

Regulation (EC) No 1/2003 provides that agreements
which fall under Article 81(1) which satisfy the condi-
tions of Article 81(3) of the Treaty are not prohibited,
no prior decision to that effect being required. In prin-

(1) OJ L 374, 31.12.1987, p. 9. Regulation as last amended by Regu-

lation (EC) No 411/2004 (OJ L 68, 6.3.2004, p. 1).

(2) OJ L 1, 4.1.2003, p. 1. Regulation as amended by Regulation (EC)

No 411/2004 (OJ L 68, 6.3.2004, p. 1).

ciple, undertakings and associations must now assess for
themselves whether their agreements, concerted prac-
tices and decisions are compatible with Article 81 of the
Treaty.

Regulation (EEC) No 3976/87 empowers the Commis-
sion to apply Article 81(3) of the Treaty by Regulation
to certain categories of
agreements, decisions or
concerted practices relating directly or indirectly to the
provision of air transport services on routes between
Community airports and on routes between the Com-
munity and third countries.

Agreements, decisions or concerted practices concerning
consultations on passenger
tariffs on scheduled air
services and slot allocation and airport scheduling are
liable to restrict competition and affect trade between
Member States.

However, since such agreements, decisions or concerted
practices may benefit air transport users and/or air
carriers, Commission Regulation (EEC) No 1617/93 of
25 June 1993 on the application of Article 85(3) of the
Treaty to certain categories of agreements and concerted
practices concerning joint planning and coordination of
joint operations, consultations on passenger
schedules,

(3)

(4)

(5)

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and cargo tariffs on scheduled air services and slot allo-
cation at airports (1) declared that Article 81(1) of the
Treaty did not apply,
inter alia, to certain agreements,
decisions or concerted practices concerning consulta-
tions on tariffs and slot allocation at airports for air
services between Community airports. Regulation (EEC)
No 1617/93 expired on 30 June 2005.

In June 2004 the Commission initiated a consultation
on the revision of Regulation (EEC) No 1617/93 to
determine whether
the block exemption should be
discontinued, maintained in its current form or extended
in scope. The Commission received responses from
Member States, airlines,
travel agents and consumer
groups.

(10)

(11)

In view of the results of the consultation and the directly
applicable exception system introduced by Regulation
(EC) No 1/2003, there are not sufficient grounds to
continue to declare by Regulation Article 81(1) inapplic-
able to consultations on slot-allocation and airport sche-
duling agreements or to consultations on tariffs for the
carriage of passengers, with their baggage, on scheduled
air services between Community airports. However, the
airline industry should be allowed sufficient
time to
adapt to the new situation and to assess for themselves
whether their agreements and practices are compatible
with Article 81 of the Treaty and, if necessary, to amend
them. Since Regulation (EEC) No 1617/93 has already
expired, it is necessary to adopt a new block exemption
regulation for a transitional period.

Article 81(3). The assessment should inter alia consider
whether all carriers concerned can participate in the
consultations on slot-allocation and airport scheduling,
and whether these consultations are conducted in a non-
discriminatory and transparent manner.

Consultations on passenger tariffs may contribute to the
generalized acceptance of interlinable fares and rates to
the benefit of air carriers as well as air transport users.
However, consultations must not exceed the aim of facil-
itating interlining.

The results of the consultation initiated by the Commis-
sion in June 2004 for the review of Regulation (EEC) No
1617/93 indicate that the intra-Community air transport
market has evolved in such a way that the degree of
assurance that consultations on tariffs will continue to
meet all the criteria of Article 81(3) of the Treaty is
declining.

(12) A block exemption should therefore be granted until 31
December 2006 in respect of consultations on tariffs for
the carriage of passengers, with their baggage, on sched-
uled air services between Community airports. After that
date, the airline industry should assess for itself whether
agreements and concerted practices between undertak-
ings and decisions of associations of undertakings caught
by Article 81(1) of the Treaty satisfy the conditions of
Article 81(3) of the Treaty.

Arrangements on slot allocation at airports and airport
scheduling can improve the efficient utilization of
airport capacity and airspace, facilitate air-traffic control
and help to spread the supply of air transport services
from the airport. Entry to congested airports must
remain possible if competition is not to be eliminated. In
order to provide a satisfactory degree of security and
transparency, arrangements in this respect can only be
accepted if all air carriers concerned can participate in
the negotiations, and if the allocation is made on a non-
discriminatory and transparent basis.

(13)

(14)

A block exemption should be granted until 31
December 2006 in respect of consultations on slot-allo-
cation and airport scheduling in so far as they concern
air services the point of origin and/or point of destina-
tion of which are located in the Community. After that
date, in the light of the above mentioned considerations,
the airline industry should assess for itself whether agree-
ments and concerted practices between undertakings and
decisions of associations of undertakings caught by
the Treaty satisfy the conditions of
Article 81(1) of

Since 1 May 2004, the Commission has been empow-
ered to apply article 81(3) of the Treaty by Regulation in
respect of air services not only on routes between Com-
munity airports but also on routes between the Com-
munity and third countries.

the European Parliament and of

In contrast to intra-Community air traffic, air services
between Member States and third countries are in
general governed by bilateral air services agreements.
The nature and level of detail of regulatory requirements
set out in these agreements vary widely. Without preju-
dice to Community law, including Regulation (EC) No
847/2004 of
the
Council of 29 April 2004 on the negotiation and imple-
mentation of air service agreements between Member
States and third countries (2),
is common for air
services agreements to restrict and/or regulate market
access and/or pricing, which may impede competition
between air carriers on routes between the Community
and third countries. Moreover,
it is common for air
services agreements to restrict the ability of carriers to
enter into the kind of bilateral cooperation agreements
which provide consumers with alternatives to the IATA
interlining system.

it

(1) OJ L 155, 26.6.1993, p. 18. Regulation as last amended by the

2003 Act of Accession.

(2) OJ L 157, 30.4.2004, p. 7.

(6)

(7)

(8)

(9)

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(15) On routes between the Community and third countries,
the proportion of passenger
involving a
connection is appreciably higher than on intra-Com-
munity international flights. Therefore, the benefits of
interlining for consumers through tariff consultations
should be greater on routes between the Community
and third countries.

journeys

(16)

It can be assumed with sufficient certainty that consulta-
tions on tariffs for the carriage of passengers, with their
baggage, on scheduled air services between points in the
Community and points in third countries satisfy the
conditions of Article 81(3). A block exemption should
therefore be granted in respect of such consultations
until 30 June 2008.

(17) Data should be collected to enhance the Commission's
knowledge on the relative use of the passenger tariffs set
in the consultations and their relative importance for
interlining on scheduled services between the
actual
Community and third countries. The data should also
enable the Commission to better assess the effects of
regulatory restrictions flowing from bilateral air services
agreements. Air carriers participating in consultations
should therefore be required to collect data for all fare
classes in which interlinable fares are agreed, for each
IATA season from 1 July 2006.

(18)

(19)

(20)

In accordance with Article 4 of Regulation (EEC) No
3976/87, this Regulation should apply with retroactive
effect to agreements, decisions and concerted practices
in existence on the date of entry into force of this Regu-
the conditions for
lation, provided that
exemption set out in this Regulation.

they meet

Community law in the field of civil aviation that is rele-
vant for the internal market was extended to the area
comprising the Community and Norway,
Iceland and
Liechtenstein through the European Economic Area
Agreement (1). Therefore,
flights between the Com-
munity and Norway, Iceland and Liechtenstein should be
treated in the same manner as intra-Community flights
for the purposes of the application of this Regulation.

The Agreement between the European Community and
the Swiss Confederation on Air Transport (2) harmonises
the rules that apply to international civil aviation within
the area comprising the Community and Switzerland. As
long as this agreement remains in force, flights between
the Community and Switzerland should be treated in the
same manner
the
intra-Community flights
purposes of the application of this Regulation.

for

as

(21)

This Regulation is without prejudice to the application
of Article 82 of the Treaty,

HAS ADOPTED THIS REGULATION:

Article 1

Exemptions

Pursuant to Article 81(3) of the Treaty and subject to the provi-
sions of this Regulation, it is hereby declared that Article 81(1)
of the Treaty shall not apply to agreements between undertak-
ings in the air transport sector, decisions by associations of
such undertakings and concerted practices between such under-
takings which have as their purpose one or more of
the
following:

a. slot-allocation and airport scheduling in so far as they
concern air services the point of origin and/or point of
destination of which is located in the Community;

b. the holding of consultations on tariffs for the carriage of
passengers, with their baggage, on scheduled air services
between points in the Community or between, on the one
hand, points in the Community and, on the other, points in
Switzerland, Norway, Iceland or Liechtenstein;

c. the holding of consultations on tariffs for the carriage of
passengers, with their baggage, on scheduled air services
between points in the Community and points in third coun-
tries other than those referred to in point (b).

Article 2

Slot allocation and airport scheduling

Article 1(a) shall apply only if the following conditions

1.
are fulfilled:

(a) the consultations on slot allocation and airport scheduling
must be open to all air carriers having expressed an interest
in the slots which are the subject of the consultations;

(1) Agreement between the European Communities,

their Member
States and the Republic of Austria, the Republic of Finland, the
Republic of Iceland, the Principality of Liechtenstein, the Kingdom
of Norway and the Kingdom of Sweden on the European Economic
Area, OJ L 1, 3.1.1994, p. 1, as last amended by Decision of the
EEA Joint Committee No 87/2005 of 10 June 2005 amending
(Company law) to the EEA Agreement, OJ L 268,
Annex XXII
13.10.2005, p. 23.

(2) Agreement between the European Community and the Swiss

Confederation on Air Transport, OJ L 114, 30.4.2002, p. 73.

(b) rules of priority must be established and applied without
discrimination, that is to say that they must not relate
either directly or indirectly to carrier identity, nationality or
category of service; they must take into account constraints
or air traffic distribution rules laid down by competent
national or international authorities and must give due
consideration to the needs of the travelling publics and of
the airport concerned;

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(c) the rules of priority may take account of rights acquired by
air carriers through the use of particular slots in the
previous corresponding season; however, at Community
airports, new entrants as defined in Article 2(b) of Council
Regulation (EEC) No 95/93 (1) must be allocated a 50 %
share of newly created or unused slots and slots which
have been given up by a carrier during or by the end of the
season or which otherwise become available to enable new
entrants to be able to compete effectively with established
carriers on routes to/from the airport in question; at third
country airports, new entrants must be allocated a sufficient
share of such available slots for entry at congested airports
to remain possible;

(b) to the Commission according to procedures to be published

in the Official Journal of the European Union.

Article 3

Consultations on passenger tariffs

(d) the rules of priority, once established, must be made avail-

able on request to any interested party;

Articles 1(b) and (c) shall apply only if the following

1.
conditions are fulfilled:

(e) air carriers participating in the consultations must have
access, at the time of the consultations at the latest, to
information relating to:

(i) historical slots by airline, chronologically, for all air

carriers at the airport;

(ii) requested slots (initial submissions) by air carriers and

chronologically for all air carriers;

(iii) allocated slots, and outstanding slot requests listed indi-
vidually in chronological order, by air carriers, for air
carriers;

(iv) remaining slots available;

(v) full details on the criteria being used in the allocation.

(f) If a request

for slots is not accepted,

the air carrier
concerned shall be entitled to a statement of the reasons
therefor.

2.
The Commission and the Member States concerned shall
be entitled to send observers to consultations on slot allocation
and airport scheduling held in the context of a multilateral
meeting in advance of each season. For this purpose, air
carriers
shall give the Member States concerned and the
Commission the same notice as is given to participants, but not
less than 10 days' notice, of the date, venue and subject matter
of the consultations.

Such notice shall be given:

(a) to the Member States concerned according to procedures to
those

be established by the competent authorities of
Member States;

(a) the participants must only discuss air fares to be paid by
air transport users directly to a participating air carrier or
to its authorized agents, for carriage as passengers on a
scheduled service, and the conditions relating to those fares
and rates; the consultations must not extend to the capacity
for which such tariffs are to be available;

(b) the consultations must give rise to interlining, that is to
say, air transport users must be able, in respect of the types
of fares or rates and of the seasons which were the subject
of the consultations:

(i) to combine on a single transportation document the
service which was the subject of the consultations, with
services on the same or on connecting routes operated
by other air carriers, whereby the applicable fares, rates
and conditions are set by the airline or airlines effecting
carriage; and

(ii) in so far as is permitted by the conditions governing
the initial reservation, to change a reservation on a
service which was the subject of the consultations onto
a service on the same route operated by another air
carrier at the fares, rates and conditions applied by that
other carrier;

(c) the air carrier must be able to refuse to allow combinations
and changes of reservation for objective and non-discrimi-
natory reasons of a technical or commercial nature, in par-
ticular where the air carrier effecting carriage is concerned
with the credit worthiness of the air carrier who would be
in which case the
for this carriage,
collecting payment
latter air carrier must be notified thereof in writing;

(d) the passenger tariffs which are the subject of the consulta-
tions must be applied by participating air carriers without
discrimination on grounds of passenger nationality or place
of residence;

(1) OJ L 14, 22.1.1993, p. 1, as last amended by Regulation (EC) No
1554/2003 of the European Parliament and the Council (OJ L 221,
4.9.2003, p. 1).

(e) participation in the consultations must be voluntary and
open to any air carrier who operates or intends to operate
direct or indirect services on the route concerned;

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(f) the consultations must not be binding on participants, that
is to say, following the consultations the participants must
retain the right to act independently in respect of passenger
tariffs;

(g) the consultations must not entail agreement on agents'
remuneration or other elements of the tariffs discussed;

(h) where filing of tariffs is required, each participant indivi-
dually must file each tariff which was not the subject of the
consultations, with the competent authorities concerned; in
so doing it must be able to act itself or through its filing
agent or through its general sales agent;

As from 1 July 2006, air carriers participating in consul-
2.
tations on passenger tariffs for scheduled air services between
points in the Community and points in third countries shall
collect data with regard to:

(i) the number of tickets issued at tariffs set in these consulta-
tickets issued for traffic

tions in the total number of
between the European Community and third countries;

(ii) the extent to which tickets at tariffs set in these consulta-

tions are actually used for interlining;

(iii) the extent to which tickets which are not at tariffs set in

these consultations are actually used for interlining.

That data shall be collected for all fare classes in which interlin-
able fares are agreed. The data collected shall be provided to
the Commission by or on behalf of the air carriers involved at
six-monthly intervals.

3.
The Commission and the Member States concerned shall
be entitled to send observers to consultations on passenger
tariffs. For this purpose, air carriers shall give the Member

States concerned and the Commission the same notice as is
given to participants, but not less than 10 days' notice, of the
date, venue and subject matter of the consultations.

Such notice shall be given:

(a) to the Member States concerned according to procedures to
those

be established by the competent authorities of
Member States;

(b) to the Commission according to procedures to be published

in the Official Journal of the European Union.

A full report on the consultations shall be submitted to the
Commission by or on behalf of the air carriers involved at the
same time as it is submitted to participants, but not later than
six weeks after the consultations were held.

Article 4

Entry into force

This Regulation shall enter into force on the […] day following
that of its publication in the Official Journal of the European
Union.

Exemptions granted pursuant to Article 1(a) and (b) shall apply
until 31 December 2006.

Exemptions granted pursuant to Article 1(c) shall apply until
30 June 2008.

This Regulation shall apply with retroactive effect to agree-
ments, decisions and concerted practices in existence when it
enters into force, from the time when the conditions of applica-
tion of this Regulation were fulfilled.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, […]

For the Commission

Member of the Commission