COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Aviation: Open and Connected Europe
Date: 2017-06-08
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: agreement (EU), air space, air transport, carriage of passengers, competition policy, competitiveness, foreign investment, restriction on competition, services of general interest, third country

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   EUROPEAN COMMISSION  Brussels, 8.6.2017  COM(2017) 286 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Aviation: Open and Connected Europe {SWD(2017) 207 final}  
 
 
1.  INTRODUCTION  

1.1. A strong aviation sector for a stronger Union 

Aviation is crucial for the European Union. It drives economic growth, creates jobs, facilitates 
trade  and  allows  people  to  travel.  Today  European  aviation  represents  26%  of  the  world 
market,  contributing  €510  billion  annually  to  Europe's  Gross  Domestic  Product,  and 
supporting 9.3 million jobs in Europe.  

Open  and  connected  aviation  markets  offer  better  value  flights  to  a  greater  choice  of  travel 
destinations  worldwide.  Air  connectivity  is  relevant  for  the  travelling  public  and  for 
businesses and the economy at large as the better a city, region or country is connected by air 
to  other  destinations  in  Europe  and  other  parts  of  the  world,  the  more  growth  can  be 
generated. Air travel has substantially increased since the creation of the EU's Single Aviation 
Market 25 years ago. The number of daily flights has increased from less than 10,000 in 1992 
to  around  23,000  in  2016.  In  addition  passengers  now  have  access  to  more  destinations. 
Today there are around 7,400 routes compared to less than 2,700 in 1992. In 2015, over 1.45 
billion passengers departed or arrived at EU airports. 

European aviation must remain globally competitive and seize the opportunities offered by a 
fast-changing  global  economy,  in  a  sustainable  way.  That  is  why  in  December  2015  the 
European Commission presented an "Aviation Strategy for Europe"1, setting out an ambitious 
vision  for  the  future  of  European  aviation.  It  aims  at  boosting  Europe's  economy, 
strengthening  its  industrial  base  and  reinforcing  its  global  leadership  position  in  aviation 
whilst  addressing  environmental  and  climate  challenges,  thus  contributing  directly  to  the 
Commission's strategic priorities.  

1.2. The Aviation Strategy for Europe is delivering 

The Aviation Strategy for Europe laid out a series of policy actions to be taken in the coming 
years. The present Communication and the proposal and Guidelines referred to in it, presented 
simultaneously, contribute to this Strategy and more precisely action intended to achieve the 
following: 

  Maintain  leadership  in  international  aviation,  by  safeguarding  competition  and  by 

facilitating foreign investment into EU airlines. 

  Tackle  limits  to  growth  in  European  skies,  by  improving  connectivity  and  airspace 

efficiency.  

2.  A LEADER IN INTERNATIONAL AVIATION  

2.1. Safeguarding competition in aviation  

The  EU  is  improving  market  access  and  investment  opportunities  for  European  aviation  in 
important  overseas  markets  by  helping  it  to  increase  its  international  presence  and  ensuring 
open  market  conditions  for  all  EU  airlines.  Concluding  EU  aviation  agreements  with  third 

1  

Communication from the Commission 'An Aviation Strategy for Europe', COM/2015/0598 final. 

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countries  supports  an  open  and  connected  market.  It  offers  more  flights  and  destinations  at 
cheaper prices. Some agreements are already in place, others are currently being negotiated or 
still need to be signed (Ukraine), and more are expected to be negotiated in the coming years 
based on the recommendations from the Commission to the Council to authorise the opening 
of further negotiations.   

Today  there  are  no  international  standards  within  the  World  Trade  Organisation  or  the 
International Civil Aviation Organisation covering access to markets. That is why the EU sets 
out the conditions for market opening with third countries through its aviation agreements in 
order to create legal predictability and certainty for investors.  

However  in  the  absence  of  an  EU  aviation  agreement  with  a  third  country  concerned,  or 
where  existing  agreements  (EU  or  national)  do  not  contain  sufficient  rules  addressing 
practices  negatively  affecting  competition,  European  connectivity  may  be  harmed  if  EU 
airlines  are  subject  to  such  practices  from  third  countries  or  third  country  entities.  In  the 
longer run, if they are allowed to persist, such practices may have a negative impact on the 
competitive  situation  on  the  market  and  consequently  lead  to  less  choice,  less  connectivity 
and higher prices for EU citizens and businesses.  

EU  airlines  are  of  course  responsible  for  their  own  competitiveness  and  should  continue  to 
adapt their products and business models to market conditions. However, where the Union's 
connectivity  and  competitiveness  in  international  air  transport  are  put  at  risk  through 
discriminatory practices, the EU should be able to take appropriate action. 

Different actions  are necessary  to  reduce the risk of practices affecting competition. Firstly, 
the EU and  its Member States  should pursue their  efforts in the international context of the 
International  Civil  Aviation  Organisation  and  the  World  Trade  Organisation  to  actively 
support the development of multilateral rules guaranteeing the same market access conditions 
and  a  global  level  playing  field  for  all  airlines.  Secondly,  the  EU  and  its  Member  States 
should continue engaging with third countries and address this issue in the context of aviation 
agreements2. These remain the EU's preferred course of action.  

Rules are also needed at EU level to allow the submission of complaints to the Commission.  
An investigation may then be conducted by the Commission to determine if EU airlines have 
been  harmed  by  relevant  practices  from  third  countries,  which  could  lead  to  compensatory 
measures being taken. The current Regulation concerning these matters3 has proven to be ill-
adapted in its approach and needs to be replaced with a more effective instrument.  

The Commission: 

  Proposes  a  new  Regulation  to  safeguard  competition  in  air  transport,  replacing 

Regulation (EC) No 868/2004. 

  Urges  the  Council  to  allow  the  opening  of  negotiations  for  further  EU 
Comprehensive  Aviation  Agreements  (Bahrain,  China,  Kuwait,  Mexico,  Oman 

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http://ec.europa.eu/transport/modes/air/aviation-strategy/external_policy. 
Regulation (EC) No 868/2004 concerning protection against subsidisation and unfair pricing practices 
causing injury to Community air carriers in the supply of air services from countries not members of the 
European Community. 

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and Saudi Arabia), and to swiftly decide on the signing of the EU Comprehensive 
Aviation Agreement with Ukraine. 

2.2. Facilitating foreign investment into EU airlines  

In order to grow, European airlines need access to investment, including foreign investment. 

The liberalisation of the EU's aviation market has removed all barriers to investment between 
European airlines. This has benefited both airlines and passengers, improving the viability of 
airlines and providing more flights.  

Foreign  airlines  are  not  only  allowed  to  operate  within  the  EU,  but  also  to  invest  in  EU 
airlines.    However,  under  the  current  rules4,  investment  in  EU  airlines by  third  countries  or 
third  country  nationals  cannot  exceed  49%  of  ownership,  and  effective  control  of  the 
company must remain in the hands of Member States or their nationals. Failing that, airlines 
cannot  be  allowed  or  continue  to  operate  as  EU  airlines.  Several  major  foreign  investments 
have  taken  place  in  recent  years  triggering  reviews  by  EU  Member  States  and  by  the 
Commission to ensure that these requirements remain fulfilled. 

Therefore in order to improve legal certainty and bring clarity to foreign investors and airlines 
alike on which investment schemes allow the continuation of operations as an EU airline, the 
Commission is presenting interpretative guidelines on the current ownership and control rules 
contained  in  Regulation  (EC)  No  1008/2008.  These  guidelines  outline  the  methodology 
followed  by  the  Commission  when  assessing  the  ownership  and  control  requirements, 
relevant notably to foreign investment cases.  

As a next step, the ownership and control rules will be reviewed by the Commission and if 
need be adapted to remain relevant and effective in a fast-changing aviation market. 

The Commission: 

  Presents  interpretative  guidelines  on  the  ownership  and  control  rules  for 

European airlines contained in Regulation (EC) No 1008/2008. 

  Carries out a review of the rules on ownership and control of EU airlines, as part 

of the evaluation of the Regulation No (EC) 1008/20085. 

3. TACKLING LIMITS TO GROWTH IN EUROPEAN SKIES 

3.1. Improving air connectivity 

Air  travel  remains  a  challenge  for  certain  regions  in  the  EU,  which  may  also  concern  the 
outermost regions. The EU has recognised the need to address cases where, on certain routes 
and  due  to  specific  conditions,  insufficient  demand  or  market  failure  prevented  to  provide 

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Regulation (EC) No 1008/2008. 
Proposals will be subject to Commission better regulation requirements. 

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enough  flights  to  serve  the  needs  of  local  communities.  In  such  cases,  Public  Service 
Obligations can guarantee notably that peripheral or development regions are well-connected 
to the rest of Europe. In order not to harm competition, Public Service Obligations in the EU 
are  only  allowed  under  very  specific  conditions  set  out  in  Regulation  (EC)  No  1008/2008. 
However experience shows that the existing rules are not always implemented in a consistent 
manner,  which  may  undermine  the  objective  of  safeguarding  both  connectivity  and 
competition on those routes.  

The  Commission  is  therefore  presenting  interpretative  guidelines  to  bring  clarity  on  the 
questions  raised  by  Member  States  and  local  authorities  in  the  conception,  design  and 
implementation of their Public Service Obligation regimes. These guidelines will outline the 
methodology  followed  by  the  Commission  when  assessing  a  Public  Service  Obligation.  It 
should help Member States to correctly and effectively apply Public Service Obligation rules 
where  appropriate  as  one  of  the  options  to  address  connectivity  gaps.  As  a  next  step,  the 
Public  Service  Obligation  rules  will  be  reviewed  and  if  need  be  adapted  in  order  to  ensure 
they remain effective and clear. 

The Commission: 

  Presents  interpretative  guidelines  on  the  Public  Service  Obligation  rules 

contained in Regulation (EC) No 1008/2008. 

  Carries  out  a  review  of  the  Public  Service  Obligation  rules,  as  part  of  the 

evaluation on the Regulation No (EC) 1008/2008. 

Furthermore, the Commission services are currently developing a connectivity index to better 
identify  connectivity  gaps  and  to  benchmark  different  levels  of  air  services  between  EU 
regions. This index will be published by the end of 2017. 

3.2. Enhancing airspace efficiency 

The main challenge for the growth of European aviation is to reduce the efficiency constraints 
which  are  seriously  impeding  the  European  aviation  sector's  ability  to  grow  sustainably, 
compete  internationally,  and  causing  delays.  The  fragmentation  of  the  European  airspace 
costs at least EUR 3 billion a year and up to 50 million tonnes of carbon dioxide. 

The Single European Sky is a concrete example of where the EU is making a difference by 
raising  capacity, 
improving  safety  and  cutting  costs  while  minimising  aviation's 
environmental  footprint.  Despite  these  improvements,  traffic  disruptions  related  to  adverse 
weather conditions, technical failures, exceptional events, crisis situations as well as industrial 
action continue to severely hinder air travel in Europe6. In addition a number of vital reforms 
put forward by the Commission to improve airspace efficiency, with shorter routes and lower 
operational  and  environmental  costs  remain  blocked  in  the  Council  since  2014  (SES  2+). 

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In  2016,  ATFM  en-route  delays  were  due  to  the  following  causes  in  the  following  proportions:  ATC 
capacity/staffing (57%), weather conditions (19%), ATM strikes (14%) and other events (9%). 

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These reforms could generate EUR 36 billion in savings over the next 20 years and create up 
to 11,000 jobs.  

Of all the causes of air traffic disruption, industrial action in the form of strikes poses the most 
complex  challenges  as  Air  Traffic  Management  strikes  usually  result  in  many  flight 
cancellations  and  delays,  leaving  passengers  stranded  at  airports.  These  actions  seriously 
affect  the  functioning  of  the  internal  market7.  From  2005  to  2016,  243,660  flights  were 
cancelled  as  a  result  of  Air  Traffic  Management  strikes,  affecting  an  estimated  27  million 
passengers. Over the same period, costs of more than EUR 1 billion due to delays alone have 
been incurred by airlines as a result of Air Traffic Management industrial action. 

The  right  to  strike  is  a  fundamental  right8.  It  is  today  governed  in  essence  by  national  law. 
Some  practices  applied  already  today  in  various  Member  States  help  to  reduce  flight 
cancellations and delays for European travellers The Commission has identified a number of 
operational  measures  which  could  be  implemented  by  stakeholders  to  address  these  issues. 
These  include  improving  social  dialogue  in  Air  Traffic  Management  sector  -  building  upon 
the  toolbox  developed  by  the  social  partners,  but  also  early  notification  of  strikes  by  the 
unions, individual notification of staff members, protection of overflights and protection of air 
traffic peak periods.  

The Commission: 

  Encourages Member States and stakeholders, including social partners, to apply 
the following practices with a view to improving service continuity in air traffic 
management: 

o  Promote  a  sound  and  efficient  social  dialogue  in  Air  Traffic  Management  
undertakings  -  Reducing  the  impact  of  industrial  action  on  the  Air  Traffic 
Management network starts by reducing the probability of strikes through better 
social dialogue;  

o  Unions to provide early notification of strikes - Providing  sufficient notice in 
advance of a strike in order to enable aviation stakeholders to prepare mitigation 
plans ahead of industrial action (e.g. at least 14 days prior to the beginning of the 
strike);  

o  Staff  members  to  provide  individual  notification  of  their  participation  to 
industrial action - Individual notification of staff members in sufficient time to 
allow the management to organise the air traffic and manage the staff upfront of 
the strike (e.g. 72 hours prior to the beginning of the strike); 

o  Preserve  overflights  of  Member  States  affected  by  strikes  -  Ensuring  100% 

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Indeed, since the launch of the Single European Sky in 2004, the EU aviation network has been subject to 375 days 
of strikes, the equivalent of more than a year of strike over a thirteen-year period.  
Enshrined  in  Article  28  of  the  Charter  of  Fundamental  Rights  which  provides  that:  "Workers  and  employers,  or 
their  respective  organisations,  have,  in  accordance  with  Union  law  and  national  laws  and  practices,  the  right  to 
negotiate and conclude collective agreements at the appropriate levels and, in cases of conflicts of interest, to take 
collective action to defend their interests, including strike action". See also Article 6 of the European Social Charter 
(revised) which recognises the right of workers and employers to collective action in cases of conflicts of interest, 
including the right to strike. 

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continuity  of  service  for  flights  crossing  the  airspace  of  strike-affected  Member 
States  will  reduce  considerably  the  impact  on  the  entire  European  Air  Traffic 
Management network;  

o  Protect air traffic peak periods  - Strikes occurring during peak periods of the 

day and peak periods of the year should be avoided. 

  Encourages  operational  stakeholders  and  the  Network  Manager  to  reinforce 
their cooperation to address traffic disruptions in the event of strikes and further 
develop  existing  mitigation  measures.  Air  navigation  service  providers  are 
encouraged  to  enter  into  cooperative  agreements,  on  bilateral  or  multilateral 
bases,  to  improve  service  continuity  in  the  event  of  strikes.  The  Network 
Manager should monitor progress in that area through a strike registry.  

  Will, together with stakeholders, further explore the concept of a more integrated 
operating  European  Airspace  with  a  view  to  ensuring  optimal  continuity  of 
service. It will also investigate measures in the Single European Sky performance 
framework  to  better  reflect  the  impact  of  strikes  on  Air  Traffic  Management 
performance.  

  Urges  the  co-legislators  to  swiftly  adopt  the  Single  European  Sky  (SES  2+) 
proposals  and  will  continue  to  work  with  the  Member  States  and  other 
stakeholders towards the full implementation of the Single European Sky. 

4. CONCLUSION 

A strong, competitive and sustainable European aviation sector is essential to support the EU's 
economy.  

EU aviation should remain a leader internationally. This should notably be enabled by tapping 
into new international markets and by ensuring open competition between all airlines. Foreign 
investment into EU airlines should also be facilitated.  

The  EU  should  also  enjoy  broad  connectivity  and  maximise  the  efficiency  of  its  airspace. 
Action both at EU and national levels will allow the aviation sector to operate efficiently, in 
cases of market failure or air traffic disruptions.     

The above actions are necessary to have an open and connected aviation market that directly 
benefits EU citizens, workers and businesses. 

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