CELEX: 51990PC0063
Language: en
Date: 1990-03-08
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ON THE OPERATION OF AIR CARGO SERVICES

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       COMMISSION OF THE EUROPEAN COMMUNITIES
                                                C0M(90) 63 final
                                                Brussels, 8 March 1990
                              Proposal for a
                         COUNCIL REGULATION (EEC)
                 on the operation of air cargo services
                      (presented by the Commission)
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                          Explanatory Memorandum
    In 1982 the Commission published a study on air freight. This study
    showed clearly that strong competition exists for the movement of
    freight  inside the Community between air and road.          In particular
    air transport seemed to be at a disadvantage because of costs but
    in particular because of delays in the transport chain caused by
    the regulatory environment within which air cargo services have to
    operate. This was in particular the case because each air freight
    operation   involves  many   participants    with  no  one   party    taking
    responsibility for the whole transport operation. The facilitation
    directives   (1)  did  provide    some   opportunities   to    improve   the
    situation,   but  matters    are   still   not  satisfactory.     Many   new
    developments; door to door service, small package delivery service,
    Just in time service, 1, 2, 3, 4 day delivery, the growth             in the
    transportation of perishable goods and of livestock have all served
    to underline the need for reform.
    Air cargo services have different requirements from the passenger
    market. Cargo is inanimate and less sensitive to intermediate stops
    or  reloading,   it  has   In common,     however,  that   more   and   more
    emphasis Is placed on speed and quality of service.
(1) OJ N° L 359 Of 22.12.1983.
    OJ N° L 24 of 27.1.1987.
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2. The  rather   complicated    chain   of   transport  for   traditional    air
   freight,   I.e. from shippers      to freight    forwarder    to airline   to
   freight forwarder to shipper, each being responsible for only part
   of the total movement explains the growth of express air freight
   where one organisation, "the Integrator", takes responsibility for
   the whole movement of freight        from door    to door and     thereby  is
   better   responding  to the demand       for more speed     and   quality  of
   service.
3. Air   freight   operators    have   difficulties    to   react     to  market
   development   because of regulatory restrictions         in particular    for
   market  access. As a consequence        their competitive situation       has
   deteriorated. This     is unfortunate     since air   freight    can make a
   valuable contribution to the overall economic situation of an air
   carr1er.
4. The air carriers have equally well seen the market potential of
   door to door products      In addition to the traditional         airport  to
   airport service. In their efforts to meet this market demand they
   are hampered by existing regulations in the air transport sector.
   The basis for the exercise of all cargo services Is the operating
   rights which derive from the bilateral air services agreements or
   arrangements. The existing       EEC regulations which       liberalise   the
   intra Community air services (the so-called December 1987 package)
   are limited to air freight in combination with passenger services.
   Air services carrying only cargo and mail are excluded from these
   regulations.
5. The gradual   liberalisation and deregulation of the road transport
   sector   has  Improved   the competitive position of         road   transport
   versus the transportation of goods by air. Not only on the short
   distance, but also on the medium to long distance the traditional
   air carriers face severe competition from road hauliers and they
   experience a gradual reduction of their market share.
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6.  In order to give air carriers the same marketing opportunities as
   their competitors so that they can compete on equal terms, It will
   be necessary to lift existing limitations on market entry, market
   access and operating flexibility for all air carriers including the
    integrators, that are presently operating in the EC market.
7. Another    condition     for   creating   a   level  playing     field   for   all
   operators    in the air freight market         is the liberalisation of the
   rate    setting    mechanism.     Rates   are    completely     free   for    road
   transport but in view of the specific safety considerations for air
   transport     it  is    proposed    to  retain    certain   possibilities      for
   intervention. To this end it is suggested that rates should remain
   to be filed with governments, but only for               information purposes.
   Only when a government         is not convinced that the rate includes a
   sufficient     margin    to   ensure   satisfactory     techncial    and   safety
   standards it can ask the Commission to disapprove that cargo rate.
8. It should be taken into account that air cargo creates a vital link
   between     Member    States.     The   close     relationship     between     the
   availability of air cargo capacity and the development of                    trade
   makes    it necessary     to take a major       step   towards a substantial
   liberalisation of air cargo services.
9. The total amount of cargo that is moved by air within the Community
   is very limited. Only 400 000 tonnes of cargo, representing 0.08%
   of the total movement of cargo in the Community               is transported by
   air. Combi     aircraft     mostly   are used    for   the   transportation of
   cargo:
                                               Intra-EC
        tonnes x 1000                 1988       1987       1986
        Combi a/c                     314.2      295.4      285.1
        Cargo only     a/c           82.2        68.4      72.1
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                               Proposal for a
                          Council Regulation (EEC)
                  on the operation of air cargo 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,
Having regard to the opinion of the European Parliament,
Having regard to the opinion of the Economic and Social Committee,
Whereas it is important to adopt measures with the aim of progressively
establishing 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 Council Decision 87/602/EEC1 only created a first step towards
the   liberalisation  of   air  services   for   cargo   in combination  with
passenger services;
Whereas Council Directive 87/601/EEC 2 is limited to the establishment
of air fares for the carriage of passengers and baggage on scheduled
air services;
1   OJ No L 374, 31.12.1987, p. 19.
2   0J No L 374, 31.12.1987, p. 12.
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Whereas   this Regulation   is without   prejudice   to the application     of
Articles 85 and 86 of the Treaty;
Whereas the air cargo industry still encounters national barriers which
hamper   the free movement   of goods by air; whereas       Increased   market
access will stimulate the development of the Community         air   transport
sector and give rise to improved services for users;
Whereas it is important to encourage the development of express parcel
services, door-to-door services, Just in time services, etc. within the
Community, so that Community carriers can fully participate           in these
worldwide developments;
Whereas some Member    States depend heavily on air cargo services for
their connections with the rest of the Community; whereas the movement
of air cargo Is an essential element for trade;
Whereas   as  a  consequence   It  is necessary    to  remove   the   existing
barriers to market access for air cargo services;
Whereas common rules concerning the granting of operating licences will
have to be developed and should be implemented after adoption by the
Council, not later than the 1st of July 1992;
Whereas   Member  States  shall   apply  their   national   rules   concerning
licensing until these common rules are implemented, provided that these
national   rules  should  not   discriminate   between  air   cargo   carriers
established within the Community, i.e. on the basis of nationality;
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Whereas Member States should not oppose the operation of fifth freedom
air services by Community air cargo carriers between the Community and
a third country when these rights have been obtained in accordance with
applicable rules and regulations;
Whereas   taking   into account    airport    infrastructure    and   navigational
aids it is necessary to include certain limitations concerning the use
of traffic rights;
Whereas it is desirable to complement the existing regulations with a
procedure to establish cargo rates not only on air services carrying
only cargo and mail but also on air services for cargo In combination
with passengers;
Whereas    publication   of   all    available     cargo    rates   creates    more
transparency in the market place;
Whereas   air   carriers  need    flexibility     in   setting   cargo   rates   in
accordance with their own commercial         judgement    in order to be better
able to compete; whereas it is also necessary, however, to ensure that
cargo   rates   include  a sufficient      margin    to guarantee     satisfactory
technical and safety standards,
HAS ADOPTED THIS REGULATION:
                            Scope and Definitions
                                     Article 1
This Regulation concerns:
    a)   access to the market for Community air cargo carriers
    b)   criteria   and  procedures    for   the establishment      of  air  cargo
         rates on an airport to airport basis.
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                                       Article 2
For the purpose of this Regulation:
a)  "Air cargo carrier" means an enterprise with a valid                licence to
    operate air cargo services carrying only cargo and mail;
b)  "Community air cargo carrier" means:
    (I) an air cargo carrier which has its central administration and
          principal place of business In the Community, the majority of
         whose shares are owned by nationals of Member              States and/or
         Member    States    and   which   is effectively    controlled    by   such
          persons or States,
    (I D a n  air carrier which, at the first of January 1990, did not
         meet the definition set out in (I) but:
          (1) either has Its central administration and principal              place
               of  business     in   the   Community   and  has   been   providing
               scheduled    or   non-scheduled     air  cargo   services    In   the
               Community during the 12 months prior to adoption of this
               Régulât ion,
          (2) or has been providing scheduled or non-scheduled air cargo
               services between Member States on the basis of third and
               fourth freedom traffic rights during the 12 months prior to
               adoption of this Regulation;
c)  "cargo rates" mean the prices to be paid for the carriage of cargo
    and    mail   and   the    conditions    under   which  these    rates    apply,
    including remuneration and conditions offered to agency and other
    aux 11iary services.
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d) "air cargo service" means scheduled or non-scheduled air services
   carrying only cargo and mail;
e) "a third-freedom traffic right" means the right for an air carrier
   established in one State to put down, in the territory of another
   State, passengers, cargo and mall taken up in the State in which it
   is registered;
   "a fourth-freedom traffic right" means the right for an air carrier
   established  in one State to take on, in the territory of another
   State, passengers, cargo and mail, for off-loading in the State in
   which it is registered;
   "a fifth-freedom traffic right" means the right for an air carrier
   to undertake the commercial air transport of passengers, cargo and
   mail, between   two States other   than  the State   In which    it  is
   registered;
   "cabotage" means   the right  for an air carrier   to undertake     the
   commercial air transport of passengers, cargo and mail between two
   points within a Member State other than the State In which        It Is
   registered;
f) "airport system" means two or more airports grouped       together   as
   serving the same city;
g) "States concerned" means the States between which       an air    cargo
   service Is operated;
h) "State  of  registration"  means  the   Member State   in   which   the
   Community air cargo carrier is registered.
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                             Operating Licences
                                  Article 3
1. The Council shall adopt, on the basis of a Commission proposal to
   be  submitted    at   the   latest    the   1st  of   July   1991,   and   for
   implementation at the      latest the 1st of July 1992, common           rules
   concerning the granting of operating licences as air cargo carriers
   to undertakings established in the Community.
2. Until such common rules enter        in force Member States shall, on a
   non-discriminatory basis, grant such         licences a/id ensure that air
   cargo  carriers    established    on   their   territory   apply   technical,
   operational and economic requirements. Member States shall publish
   such requirements and communicate them to the Commission.
                                Market Access
                                  Article 4
1. Community air cargo carriers, duly authorised under Article 3 shall
   be permitted    to exercise third, fourth and fifth-freedom           traffic
   rights between airports or airport systems In one Member State to
   airports or    airport   systems    in another    Member   State when    these
   airports or airport systems are open for Intra-Communlty air cargo
   services.
2. In operating Intra-Communlty air cargo services Community air cargo
   carriers shall    be permitted     by the State concerned        to  exercise
   cabotage between points within that Member State when the Community
   air cargo carrier meets the common rules establishing according to
   Article   3. Until    such  common    rules   have   been  established,    the
   Community   air cargo carrier must meet the technical, operational
   and economic requirements referred to In Article 3(2) of the Member
   State within which cabotage will be exercised.
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3.   In operating Intra-Communlty air cargo services Community air cargo
    carriers shall     be permitted by the States concerned      to exercise
    traffic rights on routes between Member States without calling at
    their State of registration.
4.  Member States shall not oppose the operation by Community air cargo
    carriers of fifth-freedom air services between an airport          within
    the Community and an airport       In a third country provided that the
    authorities of the third country concerned agree to the service In
    quest Ion.
                            Operating flex lb 111ty
                                   Article 5
1.  Community air cargo carriers may change aircraft at any point on a
    route and to freely position aircraft.
2.  Subject    to  the   provisions    of  Article   7 there   shall   be  no
    restrictions    on  frequency   of  service, aircraft  type   and/or  the
    amount of cargo and mail that may be carried.
               Conditions for the exercice of traffic rights
                                   Article 6
This Regulation shall not affect a Member States' right to regulate In
a  non-discriminatory     way  the   distribution   of traffic   between  the
airports within an airport system.
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                                Article 7
1. The exercise of traffic rights is subject to national, regional or
   local  operational   and technical   published   rules relating    to the
   protection  of  the environment,    social   conditions, allocation of
   slots and safety and, in particular, to the following conditions:
   a)  the airport or airport system concerned must         have sufficient
       facilities to accommodate the service;
   b)  navigational    aids  must   be   sufficient   to  accommodate     the
       service.
2. When the conditions in paragraph 1 are not met, a Member State may,
   on  a  non-discriminatory   basis,   impose   conditions   on,   limit  or
   refuse the exercice of the traffic rights. Before taking such a
   measure It shall   inform the Commission and provide It with all the
   necessary elements of information. The Commission shall examine the
   situation and within 2 months decide whether the Member State may
   take the measure.
                                  PrIcing
                                Article 8
1. Community air carriers shall publish all available cargo rates.
2. Air carriers operating    air cargo services, or cargo services         In
   combination with passengers within the Community shall         Inform the
   States concerned of their cargo rates applicable to the carriage of
   cargo and/or mail on an airport      to airport basis 30 days before
   their Introduction.
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3.   The State or States concerned may notify the Commission within 14
     days after receipt of the information by the air carriers when It
     is considered  that  the cargo rates do not    include a sufficient
     margin to ensure satisfactory technical and safety standards. The
     State or States concerned shall, In particular, examine in detail a
     cargo rate which Is 20% lower than the corresponding rate In force
     during the previous corresponding season.
4.   The Commission may give notice of disapproval of cargo rates which
     have been notified to it until 7 days before the envisaged day of
     introduction.  In the absence of such notice cargo rates may be
     applied from that day onwards.
                              Final Provision
                                 Article 9
This Regulation shall enter into force on 1 July 1990.
This   Regulation  shall   be   binding  In   Its entirety  and directly
applicable in all Member States.
Done at Brussels,                       For the Council,
                                         The President
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                                                               COM(90) 63 final
                                                     DOCUMENTS
EN                                                                              07
                                Catalogue number : CB-CO-90-103-EN-C
                                                             ISBN 92-77-58234-0
Office for Official Publications of the European Communities
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