Communication from the Commission - Creation of a common aviation area with Tunisia
Date: 2008-10-03
Institutions: European Commission
Subjects: Tunisia, air space, air transport, cooperation policy, transport policy

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 3.10.2008 
COM(2008) 603 final 

COMMUNICATION FROM THE COMMISSION 

Creation of a Common Aviation Area with Tunisia 

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COMMUNICATION FROM THE COMMISSION 

Creation of a Common Aviation Area with Tunisia 

INTRODUCTION 

In its Communication Developing the agenda for the Community's external aviation 
policy1,  the  Commission  stressed  the  importance  of  creating  a  Common  Aviation 
Area  with  the  countries  to  the  east  and  south  of  the  European  Union  which  are 
included in the Neighbourhood Policy. 

The  ultimate  objective  is  to  bring  the  EU  and  its  partners  along  its  eastern  and 
southern  borders  together  within  a  common  market  with  harmonised  operational 
rules.  The  Transport  Council  of  27  June  2005  reiterated  this  objective  in  its 
conclusions on the future development of the Community's external aviation policy 
and called for a Common Aviation Area involving the EU's neighbouring countries 
to be put in place by 2010. 

The  dynamics  surrounding  this  Common  Aviation  Area  have  already  led  the 
European Union to integrate the Swiss, Norwegian, and Icelandic aviation markets, 
together with those of nine of the Western Balkan countries (June 2006), and lastly 
the Moroccan aviation market following the signing of the first Euro-Mediterranean 
agreement  in  December  2006.  At  the  request  of  the  Council,  the  Commission  will 
also  open  corresponding  negotiations  with  Jordan  and  Israel  and  continue  its  talks 
with the Ukraine. Strengthening ties between the European Union and its neighbours 
in  the  aviation  sector  is  a  key  element  for  the  development  of  the  European 
aeronautical  industry.  Amounting  to  nearly  20%  of  international  flights  to 
destinations outside the Community, air links with the EU's neighbouring countries, 
which  cover  all  segments  of  the  market  (leisure,  family  and  friends,  business) 
represent a number of flights comparable to those to North America. In addition to 
increasing the potential for growth in the aviation sector, the Common Aviation Area 
more generally represents an excellent catalyst for regional integration and economic 
development and is fully in line with the objectives of the Barcelona process and the 
action  plan  implemented  within  the  framework  of  the  European  Neighbourhood 
Policy.  The  recent  project  'Barcelona  Process:  Union  for  the  Mediterranean'  is  also 
based on the same logic. 

The  aim  to  create  a  Common  Aviation  Area  with  the  southern  Mediterranean 
countries  makes  Tunisia  an  essential  partner  for  the  European  Union.  Furthermore, 
the Euro-Mediterranean partnership set up by the association agreement2 emphasizes 
the  need  to  strengthen  cooperation  in  the  transport  sector,  develop  cooperation 

COM(2005) 79 final, 11.3.2005 

The EU-Tunisia association agreement was signed in July 1995. 

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between the parties in terms of regulations and modernise airport infrastructures and 
air traffic management.  

There is therefore an inherent consistency between the different actions undertaken 
by the European Union in respect of the Mediterranean countries and this Common 
Area project specific to the aviation sector. Moreover, this project is a response to an 
objective  shared  by  both  sides  of  the  Mediterranean.  Exchanges  within  the 
framework  of  the  'EUROMED  Aviation'  project  set  up  by  the  European  Union  to 
strengthen,  together  with  the  southern  Mediterranean  countries,  co-operation  in  the 
field of aviation, have also offered an opportunity for Tunisia to show its interest in 
opening  negotiations  with  the  European  Community  within  the  framework  of  an 
overall  aviation  agreement.  Such  a  Community  aviation  agreement  would  indeed 
allow new opportunities to be  offered  to  the  whole  aviation  sector (carriers, airport 
infrastructure managers, providers of groundhandling services) and to passengers on 
both  shores  of  the  Mediterranean.  Existing  restrictions  in  bilateral  agreements 
between the Member States of the European Union and Tunisia could be overcome: 
limitations  regarding  the  weekly  frequencies  of  services  provided  by  carriers,  the 
number of authorised carriers, airports which can be served and fares charged would 
be  abolished,  and  a  regulatory  convergence  process  could  simultaneously  be 
developed.  

DEVELOPING  AVIATION  RELATIONS  WITH  A  PARTNER  OF 
PRIMORDIAL IMPORTANCE 

The  economic  importance  and  scope  of  its  aviation  relations  with  the  European 
Union  make  Tunisia  an  essential  partner  for  the  rapid  implementation  of  the 
Common Aviation Area objective set by the Council in 2005. 

The  EU  is  Tunisia's  main  trading  partner:  73%  of  Tunisian  imports  come  from 
Europe,  which  in  turn  receives  31%  of  Tunisian  exports.  In  2006  the  value  of  this 
trade  accounted  for  nearly  16  billion  euros,  making  Tunisia  one  of  the  EU's  main 
trading partners among the southern Mediterranean countries. 

Europe is the departure point for 82% of the tourists who travel to Tunisia, which are 
an  important  source  of  foreign  currency  for  the  country.  The  Tunisian  tourist 
industry, for obvious geographical reasons, is strongly dependent on existing aviation 
links  with  Europe.  The  European  and  Tunisian  aviation  markets  are  also  closely 
linked, as attested to by the 21 air service agreements concluded between Tunisia and 
the  Member  States  of  the  European  Union:  on  this  basis  nearly  8.5  million 
passengers  were  carried  between  Tunisia  and  Europe  in  2007,  an  increase  of  more 
than 40% over 10 years. The most important individual markets in 2007 were France 
(3.5 million passengers carried), Germany (1.2 million passengers), Italy (1 million 
passengers), 
the  United  Kingdom  (650 000  passengers),  Belgium  (450 000 
passengers) and the Czech Republic (300 000 passengers). 

In  2006,  the  total  number  of  international  passengers  carried  to  Tunisia  was  10.5 
million, which illustrates the relative significance of Europe. Two thirds of Tunisia's 
total  international  traffic  was  operated  by  Tunisian  carriers,  this  proportion  being 
even higher in air links to Europe where, in key markets such as the Franco-Tunisian 
market,  Tunisian  carriers  operate  70%  of  the  services.  The  largest  scheduled 

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Community  carriers  concentrate  their  flights  on  Tunis  in  an  attempt  to  capture  the 
'high  end'  of  the  market,  whilst  providing  the  connections  necessary  to  ensure  that 
their 'hub' remains attractive. Other Community carriers also have slots in the tourist 
and  'friends  and  family'  market,  but  it  is  still  dominated  at  this  stage  by  Tunisian 
airlines. 

The  main  Tunisian  carrier  is  Tunisair,  which  operates  37%  of  the  international  air 
transport from/to Tunisia, with 3.8 million passengers carried in 2006. Set up by the 
Tunisian  Government,  it  currently  holds  74%  of  the  capital,  with  the  rest  floating. 
The  Tunisair  group  directly  and  indirectly  employs  almost  8 000  people  and  its 
business  covers  all  air  transport  job  profiles,  including  maintenance  and  airport 
assistance.  Faced  with  the  challenge  of  modernising  in  an  increasingly  competitive 
international  environment,  the  Tunisair  group  has  carried  out  structural  reforms 
which have led to the setting up of subsidiaries employing almost 4 000 people. The 
Tunisair  group  itself  owns  a  fleet  of  thirty  Boeing  and  Airbus  aircraft.  Twenty  of 
these aircraft have no business class section, which underlines the significance of the 
airline's 'tourist' clients. 

These tourist clients are the main target of the two other Tunisian airlines operating 
internationally,  Nouvelair  and  Karthago,  which  are  charter  airlines  set  up  on  the 
initiative of the tourist industry (hotels, travel agencies). 

Founded in 1989 by the leisure group 'Tunisian Travel Services (TTS)', Nouvelair is 
based in Monastir and serves 25 countries (120 airports), mainly in Europe. With its 
fleet  of  13  Airbuses,  Nouvelair  carried  almost  1.5  million  passengers  in  2006,  i.e. 
16%  of  the  international  air  transport  market  in  Tunisia.  Karthago  Airlines,  which 
was set up in 2002 to introduce charter flights to and from Djerba, is owned by the 
Karthago  group  and  uses  chartered  aircraft  to  meet  the  seasonal  needs  of  the  tour 
operators.  This  airline,  which  is  unusual  as  it  is  listed  on  the  stock  exchange, 
accounts  for  6%  of  the  international  aviation  market  in  Tunisia.  The  similarity 
between their commercial models and the fact that they each depend on a different 
reference airport (Monastir and Djerba) have led Karthago airlines and Nouvelair to 
consider  working  in  partnership  or  even  merging.  Such  a  consolidation  of  the 
Tunisian  aviation  market  would  be  consistent  with  an  aviation  agreement  with  the 
European  Community  and  would  enable  Tunisian  carriers  to  better  position 
themselves  in  a  deregulated  aviation  market  and  to  resist  any  resulting  new 
competition.  Indeed,  the  logical  move  towards  liberalisation  of  the  markets  which 
would  be  initiated  by  such  a  Community  agreement  would  mean  that  the  Tunisian 
authorities would no longer be able to set the fares for the European airlines serving 
their country, nor to oppose the traditional restrictions relating to the ownership and 
control of a Community airline.  

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The commercial potential of a Common Aviation Area between Tunisia and Europe 
is  therefore  considerable  for  consumers,  carriers  and  airports.  Additionally,  as  the 
study for the 'Euromed Aviation'3 project shows, the existing regulatory framework 
in  Tunisia  is  sufficiently  solid  and  developed  to  envisage  a  rapid  harmonisation  of 
legislation  on  the  basis  of  Community  standards,  which  is  also  one  of  the  key 

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Mission report for the Euromed Aviation Project in Tunisia (MED No 2006/132-039). 

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objectives of this Common Area. The Tunisian aviation authorities have undertaken 
to carry out a reform based on the European model to separate the supervisory and 
auditing functions from the operational functions. Similarly, it has been observed that 
in the areas of aviation safety and air navigation services, standards are comparable 
to  the  best  in  Europe  in  terms  of  regulatory  compliance  with  the  standards  and 
practices recommended by the ICAO, EASA regulations, and the Eurocontrol Safety 
Regulatory Requirements (ESARR). This process of regulatory convergence towards 
Community standards has, moreover, been encouraged and tracked by the 'Euromed 
Aviation' project, which put in place a technical assistance plan specific to Tunisia to 
meet the needs identified in the country. 

BENEFITS AND ADDED VALUE OF A COMMUNITY APPROACH 

The  civil  aviation  sector  (including  infrastructure,  operators  and  other  industrial 
sectors)  is  a  significant  component  of  the  European  economy.  Air  carriers  alone 
represent around 0.6% of the European Union's added value and employ more than 
400 000  people  (0.4%  of  the  total  number  of  people  employed  in  the  non-financial 
market economy)4, whilst the sector as a whole employs around 3 million people in 
the European Union. The creation of a single aviation market since the early 1990s 
has  significantly  contributed  to  making  the  sector  more  dynamic  and  efficient  and 
has created major economic and social benefits. Between 1992 and 2003, the number 
of  intra-Community  routes  increased  by  more  than  40%.  The  main  Community 
carriers saw productivity rise by 87% between 1990 and 20035. Tunisia can therefore 
only  profit  from  its  progressive  integration  into  the  common  aviation  market  and 
thereby benefit from its experience of the European Union in this area. The extension 
of  this  common  market,  based  on  the  liberalisation  of  traffic  rights  coupled  with 
regulatory harmonisation, will also create added value for the European industry and 
its users.  

At  this  stage,  the  Member  States  have  in  general  terms  negotiated  with  Tunisia 
restrictive  air  service  agreements  on  the  opening  up  of  markets,  but  limiting  the 
opportunities  for  carriers  and  passengers.  Mechanisms  involve  the  setting  of  the 
capacities  of  carriers  which  are  also  not  always  able  to  set  their  fares  freely. 
Similarly,  these  bilateral  agreements  do  not  allow  Community  carriers  to  serve  all 
airports  in  Tunisia  from  all  European  airports.  The  current  system  of  bilateral  air 
services  agreements  between  EU  Member  States  and  Tunisia  therefore  distorts 
patterns  of  traffic  and  may  disadvantage  certain  Community  carriers  as  well  as 
consumers in EU Member States.  

Eurostat, Statistics in focus, 37/2005, ISBN 1561-4840. 

Annex  to  the  Commission  Communication  Developing  the  agenda  for  the  Community's  external 

aviation policy, COM (2005) 79 final. 

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A global agreement with the European Community would remedy this situation and 
the  resulting  increase  in  the  number  of  direct  links  between  the  EU  and  Tunisia6 
would significantly increase trade and tourist flows. Using the example of Morocco 
and  the  single  European  market,  an  increase  in  traffic  of  about  15-20%  per  year  is 
envisaged for the first few years following the implementation of the agreement: in 
terms  of  volume,  this  would  be  an  increase  of  about  1.5 million  passengers.  These 
forecasts,  which  assume  that  existing  macroeconomic  conditions  and  policies  will 
continue,  will  undoubtedly  need  to  be  revised  upwards  in  view  of  the  very  strong 
potential for growth of the Tunisian market. 

It  is  expected  that  a  large  share  of  the  economic  benefits  would  be  reaped  by  the 
European  airline  industry  and  the  wider  European  economy.  This  could  also  allow 
Tunisian  carriers  to  be  integrated  into  existing  commercial  alliances  alongside 
Community  carriers  and  thereby  allow  integrated  products  and  better  passenger 
services to be developed. 

This  opening  up  of  aviation  markets  must  be  accompanied  by  a  parallel  regulatory 
convergence  process  in  certain  key  areas  such  as  safety,  security,  the  environment 
and regulations on State aid, thereby guaranteeing fair competition with the objective 
of applying high aviation standards on both sides of the Mediterranean. With regard 
to  environmental  issues,  the  agreement  must  be  consistent  with  the  Community’s 
commitment to promote the sustainable development of air transport: it is therefore 
important  that  the  agreement  does  not  limit  the  European  Union's  capacity  to  use 
regulatory  or  economic  instruments  in  order  to  alleviate  the  undesirable  secondary 
effects  of  the  growth  in  air  traffic,  in  particular  with  regard  to  its  contribution  to 
climate  change,  air  quality  and  noise  pollution  in  the  areas  around  airports.  The 
relevant level for implementing this process of converging Tunisian legislation with 
that  of  Europe  can  only  be  the  Community  level.  This  will  involve  issuing  a 
negotiating mandate to the European Commission to allow it to negotiate an overall 
aviation agreement with Tunisia, the final objective of which is the full integration of 
the  Tunisian  aviation  market  into  a  Common  Aviation  Area  with  the  European 
Union. 

The  establishment  of  a  Common  Aviation  Area  with  Tunisia  will  also  enable  the 
development  of  a  regional  integration  process  encompassing  not  only  aviation  ties 
with  the  European  Union,  but  also  aviation  between  the  southern  Mediterranean 
countries themselves. It is this objective which has led the European Community to 
insert  into  the  aviation  agreement  with  Morocco  a  geographical  extension  clause 
anticipating the participation of a country such as Tunisia in this Common Aviation 
Area:  the  liberalisation  of  aviation  links  between  the  EU  and  Morocco  on  the  one 
hand, and the EU and Tunisia on the other hand, could therefore potentially lead to 
the  opening  up  of  aviation  markets  between  Tunisia  and  Morocco.  Nevertheless, 
even  if  the  underlying  objective  is  identical  and  they  interact  with  each  other,  it 
seems preferable, at this stage, to negotiate these aviation agreements separately with 
each  of  the  southern  Mediterranean  countries,  in  particular  in  order  to  protect  the 

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Following the Euro-Mediterranean agreement signed with Morocco in December 2006, traffic rose by 

18% to a figure of nearly 8 million passengers carried between the EU and Morocco in 2007. 

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objective of the European Neighbourhood Policy and to respond to these countries' 
desire for 'privileged bilateral relations' with the European Union which also allows 
greater flexibility and differentiated approaches. 

Giving  the  Commission  a  mandate  to  negotiate  with  Tunisia  would  also  show  the 
European Union's determination to achieve the political objectives set by the Council 
in  2005  and  to  open  up  its  aviation  market,  subject  to  parallel  regulatory 
convergence,  with  all  its  neighbouring  countries.  Putting  in  place  a  Common 
Aviation Area with Tunisia would therefore strengthen regional co-operation and the 
integration of the aviation markets of all southern Mediterranean countries.  

CONCLUSIONS 

The  Commission  therefore  considers  it  important  to  offer  Tunisia  scope  for 
strengthened  co-operation  in  civil  aviation.  A  global  aviation  agreement  with  this 
country  would  both  cover  the  traditional  commercial  aspects  of  air  service 
agreements and also establish an ambitious framework for developing cooperation at 
the regulatory level in terms of safety, security and traffic management and facilitate 
industrial cooperation with these countries. 

The civil aviation sector offers significant opportunities to strengthen co-operation in 
the transport sector in general, with the prospect of positive benefits for both Tunisia 
and the European Union. Efforts must therefore be made to ensure that air transport 
becomes  a  key  feature  of  cooperation  with  Tunisia  and  provides  it  with  a  new 
example of integration into Community structures and European markets.  

This  agreement  represents  an  important  step  towards  the  realisation  of  a  Common 
Aviation  Area  between  the  European  Union  and  its  Mediterranean  cousins,  a  key 
objective of Community policy on external relations in the field of air transport and, 
more  generally,  a  significant  element  in  the  EU's  external  policy.  This  agreement 
with Tunisia in the area of air transport would bring considerable added value both 
politically and economically and could serve as a model for similar agreements with 
the  other  southern  Mediterranean  countries  and  therefore  contribute  to  the  regional 
integration of these countries. 

In the light of the above, the Commission proposes that the Council give it a mandate 
to  start  negotiations  with  a  view  to  concluding  a  global  agreement  allowing  the 
creation  of  a  Common  Aviation  Area  with  Tunisia.  The  Commission  will  work 
closely  together  with  Member  States  and  all  relevant  stakeholders  in  further 
developing  and  achieving  the  objectives  set  out  in  the  proposal  for  a  Council 
Decision. 

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