CELEX: 51984PC0072(04)
Language: en
Date: 1984-03-15
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ON THE APPLICATION OF ARTICLE 85 ( 3 ) OF THE TREATY TO CERTAIN CATEGORIES OF AGREEMENTS AND CONCERTED PRACTICES IN THE AIR TRANSPORT SECTOR

9.7.84                             Official Journal of the European Communities                          No C 182/3
             Proposal for a Council Regulation on the application of Article 85 (3) of the Treaty to
                 certain categories of agreements and concerted practices in the air transport sector
                                                  COM(84) 72 final
                          (Submitted by the Commission to the Council on 20 March 1984)
                                                    (84/C 182/03)
THE COUNCIL OF THE EUROPEAN                                   should be granted; whereas these exemptions
COMMUNITIES,                                                  should be granted for a transitional period only,
                                                              during which airlines can adapt to a competitive
                                                              environment;
Having regard to the Treaty establishing the Euro-
pean Economic Community, and in particular
Article 87 thereof,
                                                              Whereas, in order to achieve these benefits, it       is
                                                              desirable that the Commission should be enabled      to
Having regard to the proposal from the Commis-                declare by way of Regulation that the provisions     of
sion,                                                         Article 85 (1) do not apply to certain categories    of
                                                              agreements and concerted practices;
Having regard to the opinion of the European
Parliament,
                                                              Whereas it should be laid down under what condi-
                                                              tions the Commission, in close and constant liaison
Having regard to the opinion of the Economic and
                                                              with the competent authorities of the Member
Social Committee,                                             States, may exercise such powers after sufficient
                                                              knowledge of the content of such agreements and
Whereas Council Regulation (EEC) No . . . lays                concerted practices has been gained and it becomes
down the procedure for the rules on competition               possible to define categories of them in respect of
applying to undertakings in the air transport sector;         which the conditions of Article 85 (3) may be con-
                                                              sidered as being fulfilled;
Whereas Article 85 (1) of the Treaty may in accord-
ance with Article 85 (3) be declared inapplicable to
                                                              Whereas, under Article 5 of Regulation (EEC)
certain categories of agreements, decisions and con-
                                                               No ..., the Commission may provide that a Deci-
certed practices which fulfil the conditions con-
                                                              sion taken pursuant to Article 85 (3) of the Treaty
tained in Article 85 (3);                                     shall apply with retroactive effect; whereas it is
                                                              desirable that the Commission be also empowered
                                                              to adopt, by Regulation, provisions to the like
Whereas the provisions for implementation of                  effect;
Article 85 (3) must be adopted by way of Regulation
pursuant to Article 87;
                                                              Whereas, since there can be no exemption if the
 Whereas the air transport sector has to date been            conditions set out in Article 85 (3) are not satisfied,
 governed by a network of international agreements,           the Commission must have power to lay down by
 bilateral agreements between States and bilateral             Decision the conditions that must be satisfied by an
 and multilateral agreements between airlines;                agreement or concerted practice which owing to
 whereas the changes required to this international            special circumstances has certain effects incom-
 regulatory system to ensure the introduction of com-          patible with Article 85 (3);
 petition in the air transport sector must be effected
 gradually so as to avoid disruption to the air trans-
 port industry; whereas such disruption would
 prejudice the provision of continued and regular              Whereas the implementation of the common trans-
 services to the consumer; whereas the avoidance of            port policy as established by Council Decision . . .
 such disruption benefits the consumer;                        on bilateral agreements, arrangements and memo-
                                                               randa of understanding between Member States
                                                               relating to air transport will mean an end to the cap-
 Whereas it is desirable that, in order to bring about         acity sharing regime whereby Member States in their
 changes to the system gradually and thus to avoid             bilateral agreements provide for a 50/50 sharing of
 major disruption in the air transport industry, group         the capacity offered on the routes between the two
 exemptions for certain categories of agreements               States concerned;
 ---pagebreak---  No C 182/4                         Official Journal of the European Communities                               9.7.84
 Whereas Member States may therefore no longer                 not been a significant degree of competition in
require their airlines to enter into capacity-sharing          regard to price in the air transport sector, whereas
agreements; whereas Member States may no longer                Council Directive... on fares for scheduled air
refuse capacity increases or impose capacity reduc-            transport between Member States provides for a
tions on the designated airlines of the other Member           new procedure for the establishment of air fares
 States, unless certain conditions are met; whereas            which represents a substantial step forward in the
the liberalization of this strict capacity-sharing             introduction of price competition in the air trans-
regime should be achieved gradually and there                  port sector;
should therefore be a transitional period during
which the airlines should be allowed to adjust;
                                                               Whereas until the present the airlines were required
                                                               to obtain the approval of the government of origin
Whereas agreements between airlines on the capa-               and destination for the fares they proposed; whereas
city to be offered on a particular route have certain          it was possible therefore for one Member State to
merits in that they help to ensure provision of ser-           block innovative and competitive proposals by an
vices during the less profitable periods and on the            airline from the other Member State; whereas Direc-
less profitable routes; whereas the continued provi-           tive . . . places serious limits on the possibility of
sion of such services and the coordination of sched-           blocking such proposals in the future; whereas com-
ules and capacity will contribute to economic pro-             petition is therefore not eliminated;
gress and benefit the consumer; whereas such agree-
ments should not contain other restrictions on com-
petition which are ancillary to the agreement on
capacity and which are therefore not indispensable            Whereas airlines should be allowed to consult with
to the achievement of economic progress and con-              a view to the common preparation of price propos-
sumer benefit; whereas competition is not thereby             als in accordance with Articles 4 to 6 of Direc-
eliminated;                                                   tive . . . in view of the variety and complexity of
                                                              these fares and the conditions attached thereto;
                                                              whereas the resulting transparency on air fares ben-
                                                              efits the consumer,
Whereas certain revenue-pooling agreements lead to
an improvement in the air transport service pro-
vided by the parties to the agreement in so far as
they compensate an airline for the disadvantage
involved in operating services during the less profit-         HAS ADOPTED THIS REGULATION:
able periods;
Whereas the provision of such compensation and                                          Article 1
the consequent equalization of the burden involved
in providing services during the less profitable
periods provides an incentive for the airlines to con-        This Regulation shall apply to international air
tinue to provide such services; whereas the provi-            transport between Community airports.
sion of such services contributes to economic pro-
gress and provides benefit to the consumer; whereas
without financial incentive the provision of such
services would not continue; whereas the limitation
of pooling to 1 % of revenue means that the compe-                                      Article 2
titiveness of the more efficient airline is largely
 unaffected by the decision to pool; competition is
therefore not eliminated and the incentive toward              1. Without prejudice to the application of Regula-
 greater efficiency is therefore not affected.                 tion (EEC) N o . . . , and in accordance with
                                                               Article 85 (3) of the Treaty, the Commission may by
                                                               Regulation declare that Article 85 (1) shall not apply
                                                               to certain categories of agreements between under-
                                                               takings, decisions of associations of undertakings
Whereas, under the abovementioned international                and concerted practices which, in the sector of
regulatory system, air fares have to date been                 scheduled air transport and, for a given route, have
approved by Member States following submissions                as their object any of the following:
agreed between the airline companies; whereas the
 same tariffs have been applied by all airlines serving
a given route; whereas until the present there has             (a) capacity sharing;
 ---pagebreak--- 9. 7. 84                            Official Journal of European Communities                          No C 182/5
(b) revenue pooling;                                                                 Article 6
(c) consultation over tariffs.                             1. The Commission shall consult the Advisory
                                                           Committee on Restrictive Practices and Dominant
                                                           Positions in the Transport Industry:
2. The Regulation shall define the categories of
agreements to which it applies and shall specify in        (a) before publishing a draft Regulation;
particular:                                                (b) before adopting a Regulation.
(a) the restrictions or clauses which may, or may
                                                           2. Article 8 (4) of Regulation (EEC) No . . . relat-
      not, appear in the agreements, decisions and
                                                           ing to consultation with the Advisory Committee
      concerted practices;
                                                           shall apply, it being understood that joint meetings
                                                           with the Commission shall take place not earlier
(b) the clauses which must be contained in the
                                                           than one month after dispatch of the notice conven-
     agreements, decisions and concerted practices,
                                                           ing them.
      or the other conditions which must be satisfied.
 3. Paragraphs 1 and 2 shall apply by analogy to
 categories of concerted practices for a given route.
                                                                                     Article 7
                                                           Where the Commission, either on its own initiative
                                                           or at the request of a Member State or of natural or
                         Article 3                          legal persons claiming a legitimate interest, finds
                                                            that in any particular case agreements or concerted
                                                            practices to which a Regulation adopted pursuant to
 A Regulation pursuant to Article 2 shall be made for
                                                            Article 2 of this Regulation applies have neverthe-
 a limited period.                                          less certain effects which are incompatible with the
                                                            conditions laid down in Article 85 (3) of the Treaty,
                                                            it may in order to put an end to those effects in
 It may be repealed or amended where circumstances
                                                            accordance with Articles 4 and 6 of Regulation
have changed with respect to any factor which was
                                                            (EEC) N o . . . :
basic to its being made; in such case, a period shall
be fixed for modification of the agreements and             — address recommendations to the persons con-
 concerted practices to which the earlier Regulation             cerned, and
 applies.                                                   — in the event of failure to observe such recom-
                                                                 mendations and depending upon the gravity of
                                                                 the effects observed, adopt a Decision that
                                                                 either:
                                                                 — will prohibit them from carrying out or
                         Article 4
                                                                      require them to perform specific acts and
                                                                      impose fines, or
 A Regulation pursuant to Article 2 may stipulate
 that it shall apply with retroactive effect to agree-           — while withdrawing the benefit of the block
 ments and concerted practices to which, at the date                  exemption which they were enjoying, will
 of entry into force of that Regulation, a Decision                   grant them an individual exemption in
 issued with retroactive effect in pursuance of                       accordance with Article 5 of Regulation
 Article 5 of Regulation (EEC) No . . . would have                    (EEC) No . . . , or
 applied.                                                        — will withdraw the benefit of the block
                                                                      exemption which they were enjoying.
                          Article 5
                                                                                      Article 8
 Before adopting a Regulation, the Commission shall
 publish a draft thereof and invite all persons and         This Regulation shall enter into force on . . .
 organizations concerned to submit their comments
 within such time limit, being not less than one            This Regulation shall be binding in its entirety and
 month, as the Commission shall fix.                         directly applicable in all Member States.