Euro Round-up

On 22nd June 2006 the European Commission adopted the outlines for a future EU transport policy – including aviation. And in 2007 they published a statement of the EU's air transport policy entitled "Flying Together"- .pdf (5mb)

More thinking on transport policy is in progress. On 9/10 March 2009 policy makers and top managers of the most important transport operators, manufacturers and logistic companies gathered in Brussels at a conference to discuss the future challenges for the transport sector and kick off the preparation of the 2010 White Paper on the Future of Transport Policy

Airport capacity, efficiency and safety in Europe

As part of an exploration of possible measures to address current and future airport capacity shortages across Europe the European Commission in September 2005 launched a Consultation Paper on “Airport capacity, efficiency and safety”. The paper was aimed at the airlines, airports, air navigation providers and all other stakeholders of the air transport industry.

In an accompanying press release Vice-President for Transport, Jacques Barrot, said “We are working on Air Traffic Management and the Single European Sky to increase capacity in the sky. But if we do not address airport problems, this effort would be meaningless. We should both plan the construction of new airports, and make every effort to better utilise the existing infrastructure”. Stakeholders were asked to submit written contributions by 30th November 2005.

On 24th January 2007 the Commission published a Communication entitled "An action plan for airport capacity, efficiency and safety in Europe". According to the related press release this "provides a comprehensive action plan detailing a coherent strategy for responsibly tackling congestion at European airports". The measures described in the Communication aim to accommodate traffic growth in an environmentally sustainable manner as follows:

Early in October 2007 the EU Council reviewed the Commission's Communication and their conclusions were recorded in a press release issued at the end of the meeting - see extract attached. The ACI Europe was not wholly impressed - this is clear from the press release they issued the same day.

European Common Aviation Area (ECAA) Heathrow T5

In October 1996, the European Council granted the Commission a mandate to negotiate a multilateral agreement with the then candidate countries as well as Iceland and Norway. The object of the mandate was to open up markets between Europe and its neighbours, so that within a new, wider, European Common Aviation Area (ECAA) there would be:

* An open market in terms of access, capacity and fares and freedom of establishment without nationality clauses (on a reciprocal basis),
* Alignment with Community legislation on issues such as safety, security and air traffic management.

The negotiations with the then candidate countries were discontinued in 2002, in view of impending accession. However in December 2004, the Council of Ministers authorised the European Commission to start negotiations with eight south-east European partners (Albania, Bosnia and Hercegovina, Bulgaria, Croatia, the Former Yugoslav Republic of Macedonia, Romania, Serbia and Montenegro and the U.N. Mission in Kosovo) on a European Common Aviation Area (ECAA) agreement. The objective was to integrate the EU's neighbours in south-east Europe in the EU's internal aviation market, with open market access and full application of the EC aviation law.

The negotiations opened on 31 March 2005 with a multilateral high-level meeting, at which all negotiating parties expressed support for reaching an ECAA Agreement as quickly as possible. In order to give the ECAA partners time to prepare for the full application of EC aviation law, the EU developed a country-specific gradual approach: Once ECAA partners have fully implemented EC aviation law, ECAA airlines will have open access to the EU market. The transitional arrangements were negotiated in October and November 2005 with each ECAA partner individually. After only nine months of negotiations, the text of the ECAA agreement was agreed between all parties in December 2005.

The ECAA creates an integrated aviation market of 35 countries and more than 500 million people. The European airline industry has welcomed the new market opportunities created by the ECAA. The ECAA Agreement will extend the application of EC aviation law to ECAA partners, including issues such as economic regulation, aviation security, airport security, air traffic management, environmental protection, passenger protection and competition rules. In consequence, the Agreement will lead to equally high standards in term of safety and security across Europe.

On 14th March 2006 the Commission issued a proposal for a multilateral agreement (COM 2006/113) for approval by the European Council. The Commission's document explains the proposal in full detail.

The agreement supersedes all air service agreements between the Member States and the ECAA Partners.

Aviation and climate change - the EU Emissions Trading Scheme

The growing impact of aviation emissions on climate change is another matter high on the agenda of the European Commission. In a letter to the Liaison Group in March 2005 the Vice President of the Commission, Jacques Barrot, said the Commision agreed that there is a need to consider the introduction of economic incentives designed to internalise external costs (including environmental costs) and to encourage the industry to limit its emissions. Heathrow T5

From the outset the EU noted that one was to secure this would be to extend the EU Emissions Trading Scheme (EU-ETS) to include emissions from the aviation sector. In December 2004 the Commission asked a small consortium of environmental consultants to study and advise on the feasibility of doing this. Their report, published in July 2005, can be seen on the Commission's website 2005 Study on the inclusion of aviatiopn in the EU-ETS"along with the related attached EU Press Release on 2005 Study

Later, in March 2005, the Commission launched an internet consultation exercise aimed at seeking the views of the public and organisations on possible ways of limiting the effect which aviation has on climate change. The Report of the Survey, published in July 2005, can be seen by clicking hereReport of 2005 Survey along with the covering press releaseEC Press about 2005 Survey.

These reports culminated in a Communication EC Communication on EU-ETS 09/05 of the Commission published on 27th September 2005 recommending that aviation emissions should be included in the EU Emissions Trading Scheme. This was part of a comprehensive approach which includes research into cleaner air transport, better air traffic management and the removal of legal barriers to taxing aircraft fuel.

Meanwhile the recommendation that that aviation emissions should be included in the EU Emissions Trading Scheme was debated at a meeting of the EU's Council (Environment) on 2nd December 2005 and their conclusions are to be found on pages 7-9 of the attached EC press release

The proposals allowed for aviation to be brought into the EU ETS in two steps. From the start of 2011, emissions from all domestic and international flights between EU airports would be covered. One year later, at the start of 2012, the scope would be expanded to cover emissions from all international flights – from or to anywhere in the world – that arrive at or depart from an EU airport. The intention was for the EU ETS to serve as a model for other countries considering similar national or regional schemes, and to link these to the EU scheme over time. Therefore, the EU ETS could form the basis for wider, global action.

On 30th March 2007 the UK Government launched a consultation on the Commission's proposals and on the Government’s initial analysis of the changes required to them. The comments received will guide the UK Government’s negotiating position. Details of the consultation are to be found in the DfT's press releaseDFT Press Release on consultation to include aviation in EU-ETS. The consultation document and associated papers can be seen on The Department's website. The closing date for comments was 1st June 2007. Heathrow T5

The proposal was finally approved and signed off on 19th November 2008 and, following its publication in the EU's Official Journal on 13 January 2009, is now in force as EU Directive 2008/101/EC. Member States now have until 2 February 2010 to bring into force the laws, regulations and administrative provisions necessary to comply with this Directive. The adopted Directive contains some important changes when compared with those orginally drawn up by the Commission:-

In the UK the Government is already taking action to implement the Directive - visit our UK Issues page for details.

There is more information on the EU-ETS on the DEFRA website which includes a page on Aviation. See also:

the ICF Consulting Report commissioned by DEFRA which examines the impact on EU ETS allowance prices of the inclusion of aviation into the EU Emissions Trading Scheme; this was published in February 2006.
A useful article published in Low Fare and Regional Airlines in March 2009 by Simon McNamara, the ERA's Director of Industry Affairs, on how the scheme will work for airlines and the preparations they will need to make for its introduction

European Directive 2002/49/EC - Assessment and Management of Environmental Noise

The aim of the END is to define a common approach across the European Union with the intention of avoiding, preventing or reducing on a prioritised basis the harmful effects, including annoyance, due to exposure to environmental noise. This involves:

Such plans will aim to manage and reduce environmental noise where necessary, and preserve environmental noise quality where it is good.

For more about the implementation of this Directive in the UK vist our UK Issues Page

Air Quality

In September 2005, the Commission presented a thematic strategy on air pollution (COM 2005/446) and a proposal for a new air quality directive (COM 2005/447). The draft Directive aimed to revise the current ambient air quality legislation:

by merging five legal instruments into a single directive.
introducing air quality standards for fine particulate matter (PM2.5) in the air, because of the large health benefits to be obtained.

At the same time, more flexibility would be given to the Member States. Where they can demonstrate that they have taken all reasonable measures to implement the legislation but still need more time to comply with air quality standards in certain places, it was proposed to allow them to request a time limited extension to the compliance deadline in the affected zones under certain conditions.

Since then the proposed Directive has been working its way through the EU's legislative procedures. At its plenary session of 11 December 2007, the European Parliament adopted a compromise package of 26 amendments which had been agreed with the European Council with a view to reaching a second reading agreement. In April 2008 the EC accepted the 26 amendments. The conclusion of the compromise package was facilitated by the adoption of a declaration by the Commission on Community measures necessary for reducing emissions at source.

The proposal was finally approved as Directive 2008/50/EC dated 21st May 2008 which appeared in the European Journal on 11th June 2008. Member States have until 11 June 2010 to bring into force the laws, regulations and administrative provisions necessary to comply with the Directive. So draft regulations from the UK Government can be expected. The Directive obliges the Commission in 2013 to review the provisions related to PM2.5 and, as appropriate, other pollutants, and report to the European Parliament and the Council.

Rules and Procedures for Introducing Noise Related Operating Restrictions

EU Directive 2002/30, which came into effect on 28th March 2002, prescribes rules and procedures for introducing noise related operating restrictions at Community Airports. Members states were given 18 months in which to implement the directive. Following a consultation exercise between July and October 2002, the Government in July 2003 made the Aerodromes (Noise Restrictions) (Rules and Procedures) Regulations 2003 (SI 2003/1742). These came into effect on 6th August 2003 and provide that the responsibility for undertaking the assessments required by the Directive, and for reaching any consequent decision about operating restrictions (which may include prohibiting the noisiest aircraft from the airport either at certain times or completely), should rest with:

and that these bodies would be "competent authorities" under Article 3 of the Directive.

The Regulations give rise to interesting procedural issues where it is proposed at a non-designated airport to impose noise restrictions as a condition of planning permission, or by agreement under s.106 of the Town and Country Planning Act 1990, or significantly to alter existing restrictions imposed originally in that way. How are the new procedures to be dovetailed with the planning procedures and decision making processes which involve the local planning authority in a leading role?

The allows Member States to introduce at individual airports new operating restrictions, in particular on aircraft that are marginally compliant with ICAO Chapter 3, provided that they do so in accordance with the so-called “Balanced Approach” set out in ICAO Assembly Resolutions A33-7 and A35-5.

Article 14 of the Directive requires the Commission to report to the European Parliament and to the Council on the application of the Directive no later than five years after its entry into force. It specifies further that the Commission's report should be accompanied, if necessary, by proposals for revision of the Directive. Click here to see the Commission's Report which was issued in February 2008. This concluded:

In July 2008 the UK Department for Transport launched a consultation noting that it proposed to liaise further with the Commission and other member states in the autumn on plans for taking forward the Commission's review, so as to to clarify the provisions and scope of the Directive. To inform those discussions the Department asked for comments from interested parties in the UK about the application of the Directive, possible ways to improve it and key elements which should not be lost. The closing date for comments was 19 September 2008. The Department is now waiting for the Commission to finalise its plans and timetable for reviewing the Directive

Airport Charges

On 7 April 2006 the European Commission met representatives of the air transport industry to discuss airport charges.

Airport charges are paid by air carriers to an airport operator to cover the cost of the provision of airport facilities and services and, as a general rule, consist at least of (i) landing and take-off charges based on the maximum take-off weight of an aircraft; (ii) parking charges for parking of aircraft at an airport; and (iii) passenger charges for the use of the airport terminals. This is in contrast to airport taxes which in general have nothing to do with airport services but are levied by public authorities, mostly on air passengers, to raise revenue.

Over the past 15 years, many changes have occurred in airport and air carriers markets:

Traditional airlines are subject to increased competition in the EU and global markets, in a difficult environment after the 11 September 2001. They talk of the need to reduce the cost of aviation infrastructure which is a considerable component of operational costs.

The emergence of low cost carriers on the European Market has led to new practices, not only in terms of new services (‘low cost services' and low cost terminals) but also in terms of airport charging and the application of rebates.

Competition between airports is increasing, not only between large hubs, but also between international and regional airports, as well as between publicly and privately managed airports.

Given the congestion of EU airports and EU skies, investment in airport infrastructure is crucial. Airport charges are an important issue in the context of the extension of airport capacity.

For these reasons, the regulation of airport charges at EU level is thought to be of critical importance to ensuring a level-playing field at air carrier and airport level.

This is the background to the Commission's draft Directive published on 7th January 2007 (COM 2006/820). According to the Commission's press release this seeks "re-define the relationship between airport operators and airport users by requiring total transparency, user-consultation and the application of the principle of non-discrimination when calculating charges levied on users. Moreover, it will create a strong, independent national authority to arbitrate and settle disputes in order to achieve a speedy resolution."

On 15th January 2008 the Department wrote to stakeholders describing the progress of negotiations on this proposed Directive. The letter said that current text agreed by Member States contains a number of key amendments to the original draft, which they believe improves the draft Directive:

In June 2008 the EU Council adopted a "common position" on the proposals and this was considered by the European Parliament when it gave the Directive a second reading in October 2008. The Parliament adopted a number of amendments and these were all adopted by the EU Council when it gave final approval to the the Directive on 19th February 2009.

The proposal was finally signed off as Directive 2009/12 dated 11th March 2009. Member states have until 15th March 2011 to bring into force the laws, regulations and administrative provisions necessary to comply with the Directive. As expected the Directive applies to airports “open to commercial traffic whose annual traffic is over five million passenger movements and to the airport with the highest passenger movement in each Member State”

Aviation Security

Following the attacks in the US on 11th September 2001 the EU passed Regulation (EC) No 2320/2002 of 16 December 2002 which established common rules for civil aviation security. This was followed by a series of implementing Regulations drawn up under the auspices of the Aviation Security Regulatory Committee (AVSEC) set up under the 2002 regulation to “ensure technical adoption of the Annex to Regulation 2320/2002 and development of the necessary implementation tools”. These Regulations cover such matters as quality control, inspections and defining the parts of Airports restricted for security purposes. While these are in some respects more stringent than those previously applied in a number of Member States, they are lower than those already applied in the UK.

Regulation (EC) 2320/2002 was seen by parts of the aviation industry as lacking any clear policy as to the financing of the additional security. Because the Rgulation was a technical regulation the Commission had no vires to determine how Member States finance their compliance with it. However, at the request of the European Parliament, the Commission commissioned the Irish Aviation Authority (IAA) to carry out an urgent study to gain a clear picture of the various security systems across and within EU Member States, and to investigate the funding of civil aviation security which is known to be an uneven playing field. The IAA report, originally expected in September 2003, was finally made available at the end of 2004 and the Commission issued a Report to the EC Council (COM 2006/431) on the matter in August 2006. This said that security costs in transport can be significant and are currently largely borne by users. The report gives some insight into the different financing mechanisms which exist in the Member States and warns that the heterogeneity of approach may distort competition. It concludes that more transparency of security taxes and charges would benefit the users of transport services and that, in general, public funding of anti-terrorist measures in transport does not constitute state aid.

An earlier study by ACI Europe indicates how the responsibility for security measures differs from country to country, and within any given country, from airport to airport. The study also shows that security measures are mostly financed directly by the airport operator and that there is a clear disparity in the funding of additional post-11 September security measures among airport operators, governments and airlines. The study, says ACI, highlights “the need for governments to address, as a matter of urgency, their responsibility for harmonising and financing European civil aviation security”. For more information see ACI Europe‘s press releases of 6/11/02ACI Europe Press Release, 27/11/03ACI Europe Press Release, 26/02/04ACI Europe Press Release and 9/12/04ACI Europe Press Release . See also their reaction to the EC's August 2006 Report

In September 2005 the Commission issued a press release saying that it proposed to strengthen the common air security rules. The release says the proposal follows on from the Commission’s annual report on the implementation of the 2002 Regulation, which draws conclusions from the inspections carried out by the Commission since February 2004. Subsequently the Commission published draft Regulation (COM 2005/429) - which would replace Regulation (EC) 2320/2002. This was finally approved as Regulation (EC) No 300/2008 of 11 March 2008.

On 20 August 2008, the European Commission followed up with a new aviation security regulation which lays down measures for the implementation of the common basic standards in aviation security (Regulation 820/2008).

On 11 May 2009 the Commission adopted a proposal for a Directive (COM 2009/30) on aviation security charges in Europe. The aims are to ensure transparency, non-discrimination and consultation of airlines when fixing the level of charges, as well as the cost-relatedness of security charges. It also proposes to establish an independent supervisory authority in each Member State - for full details see the EC report which acompanied the proposal and the EC Press Release.

Passenger Name Record (PNR)

This proposal for a Council framework decision, adopted on 6th November 2007, suggests that air carriers should make available Passenger Name Record (PNR) data for flights entering or departing from the EU to a Passenger Information Unit which will be designated in each Member State. The proposal is made in the context of the fight against terrorism and transnational organised crime.

The data will be processed for the purpose of carrying out a risk assessment of the threat level of unknown passengers. Thus, the competent authorities of the Member States will receive the data in electronic form and well in advance of a flight's arrival.

Arrangements for the transmission of PNR data have been concluded with the United States and Canada. The EC believes it can be anticipated that more third countries are likely to request the provision of PNR data from air carriers operating flights from the EU.

European Aviation Safety Agency

At its meeting in Brussels on 11 July 2003, the Administrative Board of the new European Aviation Safety Agency appointed Mr Patrick Goudou as the Agency's first Executive Director.

The Agency, established under Regulation (EC) 1592/2002, became operational on 28 September 2003. At that stage is was responsible for:

For more information on the transition to the new arrangements please see the CAA's publication FODCOM 26/03**

(a) make EASA responsible for pilots' licences "to guarantee that they comply with common European rules on knowledge, skills and language proficiency".

(b) lay down the essential requirements that aircraft must observe when operating in the EU, whether they are EU or third country planes.These requirements will henceforward be the responsibility for EASA.

(c) make EASA responsible for certifying compliance of third country operators with the essential requirements for operating aircrafts in the EU.

This legislation – now known as Regulation (EC) No 216/2008 - was approved (with amendments) early in 2008.

Directive on the Safety of Third Countries' Aircraft using Community Airports

Directive 2004/36/CE - often known as the SAFA (Safety Assessment of Foreign Aircraft) Directive - aims to improve air safety in Europe by ensuring that third-country aircraft using EU airports comply with international safety standards contained in the annexes to the Chicago Convention.

Under the new legislation non-EU aircraft and their crews will face inspections if it is suspected that safety rules are not being met and standardised EU-wide inspection procedures will prevent non-EU aircraft from diverting to different airports within the Community as a way of evading safety checks. The Commission is required to publish yearly an aggregated information report available to the public, which will indicate whether there exists an increased safety risk to air passengers.

The UK Government notes that the processes it has long had in place to carry out checks under the ECAC SAFA Programme meet the intentions of the Directive, which will be implemented formally by the Civil Aviation (Safety of Third-Country Aircraft) Regulations 2006, due to come into force on 30 June 2006.

Meanwhile, on 15th May 2006 the Central Flow Management Unit (CFMU) at EUROCONTROL launched an alerting service aimed at those European states which are the departure or arrival point for an aircraft deemed by national authorities to pose a safety risk according to the Safety Assessment of Foreign Aircraft (SAFA) programme. This will allow those states to take appropriate action such as initiating an inspection, preventing the aircraft from taking off (”grounding”) or even from entering their territory.

Information for passengers on the identity of carriers and the sharing of safety information by Member States - Regulation (EC) No 2111/2005

This Regulation, made in December 2005, gives air passengers the right to be informed of the identity of the air carrier which will operate the flight(s), for which they have made a reservation and, in parallel, provides for the establishment of a Community list of air carriers subject to operating bans within the Community

The Regulation flows from a fatal air crash at Sharm-El-Sheikh on 3 January 2004 involving a passenger jet carrying 148 people to Paris. It emerged after the accident that the operating carrier was, at the time of the accident, banned from flying to Switzerland because of concerns about safety, but authorised in certain Member States. In the wake of this accident the Commission resolved to make proposals for reinforcing the current system of safety inspections based on the SAFA Directive 2004/36/EC – see above – and also to respond to public concerns that passengers should be informed of the precise identity of the company which actually transports them. Because of code sharing or wet leasing this is not always clear to passengers. It was felt that a higher degree of transparency would lead companies to strengthen their commitment to safety.

The Regulation establishes a process whereby the Commission, in consultation with Member States and using common safety criteria, will decide that air carriers should be refused permission to operate services within the Community. The Member States are responsible for enforcing the operating bans. There are provisions for a Member State to impose its own bans under exceptional circumstances, taking into account the common safety criteria, and these will be considered by the Commission for Community-wide action. In addition, a Member State may maintain a ban in its own territory when the Commission decides against Community wide action if there are safety problems specifically affecting the Member State .

The Directive provides for the Commission to publish a list of all airlines banned in this way. The list is published on the EU and both Member States and the Commission must facilitate public access to the list - see for example the DfT website. The list is updated from time to time. The October 2006 includes all air carriers certified by the authorities in the Congo, Equatorial Guinea, Kyrgyz, Liberia, Sierra Leone and Swaziland as well as Kenya's DAS Air Cargo and Uganda's Dairo Air Services. Altogether 140 airlines are listed. The popular airlines used for vacations by Europeans are noticeably absent from the list and the EU could not specify how many of the banned airlines had flown in European skies or used European airports. But some, such as Ariana Afghan Airlines, operate routes from Europe.

The Regulation also provides that an air carrier making a booking (“the contracting air carrier”) will need to ensure that the passenger is informed of the identity of the carrier(s) actually operating the flight(s). Where the precise identity of the carrier(s) is not yet known the contracting air carrier will need to tell the passenger the name or names of the air carrier(s) likely to provide the service(s) and subsequently to inform the passenger as soon as the precise identity of the carrier(s) is established. Where the operating carrier is changed after reservation the contracting air carrier will be expected to make all reasonable efforts to ensure that the passenger is informed of the change in good time and, in any case, by not later than check-in.

Article 13 of the EC Regulation requires all Member States, by 16 January 2007, to ensure compliance with these rules and to lay down effective, proportionate and dissuasive penalties for their infringement. On 2nd August 2006 the DfT began a consultation exercise on the required enforcement mechanisms. The closing date for comments was 20 October 2006. On 12th December 2006 the Secretary of State made the Civil Aviation (Provision of Information to Passengers) Regulations 2006 (SI 2006/33030) which can be seen of the Department's website along with a Note of the Responses to the Consultation and a Regulatory Impact Assessment. The new Regulations took effect on 16 January 2007

Voluntary Commitments on Air Passenger Service

In another part of its June 2000 communication on the "Protection of air passengers in the European Union" (COM 2000/365) the Commission said it would promote the preparation and adoption of voluntary commitments by European airports to set quality standards for services and to consider design standards for terminals. Likewise there would voluntary commitments for adoption by airlines covering the improvement of service quality, adequate care for delayed passengers and simple procedures for lodging complaints and mechanisms for settling disputes out-of-court. These voluntary codes should be ambitious, engage as many operators as possible and include mechanisms for monitoring compliance.

Drawn up under the auspices of the European Civil Aviation Conference (ECAC) the codes were unveiled in draft in May 2001:

Implementation finally got under way in 2002 and in the UK more than twenty airports are now signed up to the Airport Voluntary Commitments.

In the UK the monitoring of the Airport Commitments is the responsibility of the Department for Transport. In 2003 they did this on the basis of the consumer reports which signatory airports are expected to produce at least once a year. In order to build in a measure of independent validation, the Airport Consultative Committee for each airport was given an opportunity to comment on the document before it was sent to the Department.

In November 2003 the Department published its first annual report on the implementation of these Commitments:

On 2nd February 2004 the Department said that in the UK they had found that the airport authorities which had signed up to the Commitments were generally meeting the undertakings, often going much further, and in the relatively few cases where there were shortcomings the airports concerned were working hard on remedies. They were particularly pleased to note the interest and engagement of the airports’ Consultative Committees, and regard the Commitments as a helpful benchmark against which airports and their Consultative Committees can continue to assess performance. Against this background they had taken the view that the Department should now cease active monitoring, although they would be grateful to continue to receive copies of the passenger service reports required under Commitment No. 11. They would not, however, use these to compile progress reports, nor to pass on information about individual operators.

Compensation for denied boarding or the cancellation or long delay of flights

To fill perceived shortcomings in the present European rules on compensation and assistance for air passengers in the event of denied boarding, cancellation or delay the European Commission in December 2001 put forward a proposal for a new regulation. This was finally approved early in 2004 with the signing of the new Regulation (EC) 261/2004 which came into force on 17th February 2005.

The new Regulation updates and replaces Regulation (EEC) 295/91 which deals solely with compensation and assistance in the event of denied boarding. However, the new Regulation goes further and extends its scope to cover cancellations and delays. [Summary of the Regulation].

The regulation did not have an easy passage and there continues to be opposition from the industry. Heathrow T5

The EU Regulation requires Member States to ensure and supervise compliance by their air carriers and to impose sanctions for infringements that are effective, proportionate and dissuasive. In August 2004 the UK Government issued for consultation draft UK Regulations and at the end of March 2005 they issued the Civil Aviation (Denied Boarding, Compensation and Assistance) Regulations 2005 (2005/975) which came into operation on 23 April 2005.

The EU continue to be very keen to publicise the new arrangements and to ensure that there is proper enforcement across Europe. In the UK , enforcement is a two-stage process. First, the Air Transport Users Council (AUC) filters complaints from passengers, bringing to the attention of the CAA any patterns of non-compliance or suspected deliberate misapplication of the Regulation. Second, on the basis of such information, the CAA decides on the appropriate enforcement action to take, whether persuasion or legal proceedings.

On 4th April 2007 the European Commission presented a report which evaluates the results of the Regulation so far. The Report can be seen on the EC website. In an accompanying press release Commission report on working of the Regulation the Commission says: ”Although there is no doubt that air passengers enjoy better protection today, we must make sure that airlines and Member States fully comply with their obligations."

On 19 November 2008 the European Commissioner responsible for Transport, Antonio Tajani, activated an e-mail addrss where passengers can obtain information on how to exercise their rights under this Regulation.

In December 2008 there was an important ruling by the European Court of Justice (ECJ) in relation to a case between Alitalia and an Austrian family whose flight from Vienna to Brindisi via Rome was cancelled five minutes before the scheduled departure time. Accoring to the ruling airlines must pay compensation to passengers whose flights are cancelled because of technical problems. The only exception is if the technical problems are caused by "extraordinary" events outside the normal activities of the airline – such as terrorism or sabotage or a hidden manufacturing fault which suddenly comes to light. The ECJ said it is up to the airline to prove that the circumstances are "extraordinary" – and complying with the minimum rules on aircraft maintenance does not necessarily excuse a refusal to compensate passengers if mechanical failure cancels a flight. The ECJ said current EU rules give passengers the right to compensation "unless they are informed of the cancellation of the flight in due time".

The Montreal Convention

The Montreal Convention on the Unification of Certain Rules for International Air Carriage was adopted at a Diplomatic Conference in Montreal in May 1999. It was ratified by the countries of the EU on 29 April 2004 and took effect across Europe on 28 June 2004.

The Convention consolidates, updates and will eventually replace all previous international agreements on air carrier liability, including the 1929 Warsaw Convention. Each passenger will be able to claim up to £850 (or the sterling equivalent of 1,000 Special Drawing Rights (SDR) for lost, damaged or delayed luggage but they must provide evidence. If agreement cannot be reached the claimant has the right to sue the airline for the alleged damages.

The Convention also establishes a regime of unlimited airline liability for death or bodily injury in the event of an accident, putting it in line with current rules applicable to EU airlines. It will apply to flights between the UK and countries that have also ratified the Convention, such as the United States. It establishes strict liability up to 100,000 SDR (approximately £85,000), irrespective of a carrier's fault. The second tier is based on presumption of fault of a carrier and has no limit of liability. The Convention also establishes a limit of about £3525 per claim for passengers who have incurred costs resulting from a delay, where the airline is held to be at fault.

In cases of death or injury to passengers, the Convention allows contracting parties to require air carriers to make prompt advance payments to assist entitled persons in meeting immediate economic needs;

Air carriers must be adequately insured, thereby ensuring the availability of financial resources for purposes of compensation;

Legal action for damage resulting from the death or injury of a passenger may be filed in the country where, at the time of the accident, the passenger had his or her principal and permanent residence, subject to certain conditions; and

Simplification and modernisation of documentation related to the carriage of cargo.

The coming into force of the Montreal Convention brought into effect Regulation (EC) No 889/2002 which amends Council Regulation (EC) No. 2027/97 on air carrier liability in the event of accidents, thereby creating a uniform system of liability within the Community. This Regulation applies many of the provisions of the Convention to Community airlines whether they are operating within the EU or internationally. [Consolidated text of Regulation 2027/97 - .pdf format]

People with Reduced Mobility

ECAC Code of Good Conduct

The ECAC Facilitation Group has adopted Guidelines on Awareness and Disability Equality for all Airport and Airline Personnel dealing with the Travelling Public. In October 2006 these became a new Annex N to ECAC Doc. 30 on Facilitation. The new Guidelines provide practical guidance on best practice in meeting the needs of PRMs travelling through airports and sets targets for service delivery. They will serve as guidance for airport staff training. The Guidelines are also referred to in the new EU Regulation referred to below.

EU Regulation (EC) No 1107/2006

Following its consultation in 2002/03 on Airlines’ Contracts with Passengers the European Commission drew up legislative proposals on the transport of PRMs - COM (2005)47. These were finally issued in mid February 2005.

There were two essential goals: first, preventing unfair treatment, that is refusal of carriage on the basis of reduced mobility and, second, guaranteeing the provision, free of charge, of the assistance that passengers with reduced mobility need to have for air travel.

When the proposed Regulation came before the European Council there was intensive discussion of the proposals and this led eventually to a revised text of the proposed Regulation which was agreed on 6th October 2005. The most difficult issue was the question of who should be responsible for providing the assistance to disabled persons and persons with reduced mobility at airports. It was finally agreed that the managing bodies of airports should have the overall responsibility for providing such assistance.

The proposed Regulation was subsequently approved by the European Parliament following a debate in Plenary session in mid December 2005 and following its approval by the Transport Council on 9th June 2006 it was published in the Community's Official Journal on 26th July 2006

The new Regulation took effect on 26 July 2008, except Articles 3 and 4, which came into force on 26 July 2007 - Article 3 makes it illegal to refuse carriage on grounds of disability except on the grounds specified in Article 4.

On 2nd April 2007 the UK Department for Transport launched a consultation seeking the views of UK stakeholders on the enforcement of the EC Regulation 1107/2006. The Consultation Document and associated papers (including the EC Regulation, Impact Assessment and Proposed Enforcement Regulations) can be found on the Department's website. In this connection the Department held two symposiums on the proposals - one for Aviation stakeholders and another for Disability group stakeholders. That for Aviation stakeholders was held at the Department's offices in London on 15 May 200. A copy of the Department's note of the meeting is attached. Heathrow T5

In August the CAA issued guidance for UK carriers (CAA Document FODCOM 18/07) on the circumstance in which they might refuse carriage for a PRM pursuant to Article 4(1) of this Regulation, e.g. on safety grounds.

The new Regulation establishes a specific requirement for training airport and airline staff in disability awareness and in this connection the ECAC Guidelines adopted in October 2006 will be important.

The European Commission has undertaken to report to the European Parliament and the Council by 1 January 2010 on the operation and effects of the Regulation (EC 1107 / 2006, Article 17). On 18th May 2009 the UK Civil Aviation Authority (CAA) wrote to stakeholders inviting them to share their experience of the Regulation - see also the CAA's press release. The CAA is particularly interested in the experience of those concerned before and after the Regulation was implemented, and how, if at all, this has changed. The CAA expects that its final report will inform the Commission's review. The Commission has overall legislative responsibility for the Regulation. The clsoing date for responses is 31st July 2009.

Meanwhile......

The question of air travel for the disabled is already high on the agenda in the UK - see our UK Issues page.

EU rules on airport slot allocation

As long ago as June 2001 the European Commission adopted proposals to amend Regulation (EEC) No 95/93 so as to modernise the current allocation system for landing and take-off slots at EU airports with a view to clarifying some of its provisions and enhancing its efficiency. At the same time the Commission announced a fundamental review of the slot allocation system involving an in-depth study followed by a broad consultation with Member States and the aviation industry.

Progress has been slow and it was not until the end of April 2004 that amending Regulation (EC) No 793/2004 was signed giving more clarity and transparency to the current rules notably by taking away any ambiguity in relation to the principles and the procedures of slot allocation, the status of the slot coordinator and the imposition of sanctions to prevent any abuse of slots that would further worsen the scarcity of slot capacity at congested Community airports. The amendments also included clarification of the definition of a slot as a ‘permission’ rather than ‘entitlement’, thus eliminating any risk of a slot being interpreted by airlines as a property right.

These changes took effect at the end of July 2004. The sanctions to be imposed in cases of abuse are a matter for the member states and in July 2005 the UK Department for Transport launched a consultation on the sanctions to be applied in cases of repeated and intentional misuse of slots by airlines. The consultation closed on 7th October 2005. In the light of the responses, and some work on the sanctions scheme done by Airports Coordination Limited (ACL) on behalf of the DfT, the Department in October 2006 made the Airport Slot Allocation Regulations 2006 (SI 2006/2665) which took effect on 1st January 2007. The Regulations provide for the introduction of "dissuasive sanctions" to deal with repeated and intentional slot misuse at coordinated airports. It nominates the airport coordinator as the body responsible for enforcing the sanctions scheme. In the event of any dispute over sanctions, air carriers will have recourse to an independent reviewer, and ultimately to the Court by way of judicial review. The Regulations are available on the OPSI website.

The 2004 Regulation required the Commission to submit a Communication to the European Parliament and the Council on the operation of this Regulation within three years of its entry into force. The Communication shall address in particular the functioning of Articles 8, 8a and 10. This Communication was issued on 15th November 2007 - see also the Commission's press release. And on 30th April 2008 the Commission issued a further Communication dealing with a number of provisions which many stakeholders and Member States feel have not been fully or completely implemented

Meanwhile, the Commission in the autumn of 2002 appointed the National Economic Research Associates (NERA) to carry out the in-depth study which was intended as the basis for the more fundamental review. Their 402 page report was completed in January 2004. The report assesses the effects of different types of slot allocation scheme. All are market-oriented - Heathrow T5

(Note: The copy of the NERA study previously posted on the Commission's website has now disappeared. The Commission's explanation is that the NERA study was "updated" by the 2006 Mott MacDonald & Oxera study referred to below.)

In September 2004 the Commission issued a Staff Working Document setting out ideas and seeking the views of Member States. The Response of the UK Government can be seen on the DfT's website. It is worth noting that this included support for the Commission's proposal that parties other than air carriers could participate in slot trading. In theory, this proposal would allow regional bodies to buy slots to protect regional services.

In preparing for further amendments to European slots legislation the Commission engaged a consortium consisting of Mott MacDonald & Oxera to undertake a study on the secondary trading of slots. The report of the study was published in December 2006.

On 29 January 2008 the Commission organised a stakeholder hearing on the functioning of the slots Regulation. A report of hearing can be seen on Commission's website - the key conclusions are:

On 30th April 2008 the European Commission adopted a Communication on the application of the slot allocation Regulation. The Communication seeks to clarify a number of issues in order to ensure a better implementation of the existing rules and to improve the efficient use of scarce capacity at congested Community airports. In particular, it signals the acceptance of "secondary trading" of airport slots between air carriers. The Commission also issued a press release

The UK Government supports secondary trading and in 2006 it commissioned a study by DotEcon Ltd to help inform its position on the use of alternative market mechanisms (e.g. auctions) to allocate new capacity. The study was published in October 2006. The UK 's position on all slots matters is of course subject to the details of the Commission's proposals when they emerge.

Temporary Suspension of “use it or lose rule”.

In March 2009 the Commission submitted proposals (COM 121/200) temporarily to suspend the “use it or lose rule”. Currently rules force airlines to use the slots at busy airports at least 80 percent of the time or face losing them in the following season. But some airlines argued this obliges them to keep flying even when, because of the recession, this would be uneconomical. The Commission says this measure is planned for only one season. However, depending on how serious the situation appears as the 2009-2010 winter season approaches, the Commission might decide to renew all or part of the scheme. This has stirred up a good deal of controversy with criticism from the low cost carriers and the ACI Europe. Heathrow T5

Revision of the third package for liberalisation of air transport

Firm proposals for the revision of the third package were finally issued on 18th July 2006. Many of the matters covered by the proposed Regulation lie outside the ordinary remit of Airport Consultative Committees but there were proposals for the revision of public service obligations (PSOs) and also revisions to the right of member states to establish non-discriminatory rules for the distribution of air traffic between airports within the same "airport system" - Heathrow, Gatwick and Stansted is defined in the 1992 Regulation as one such system.

On 25th October 2006 the UK Department for Transport launched a consultation exercise with the aim of ensuring that the final regulation would benefit consumers and operators. The closing date for responses was 19 January 2007 and the Department's summary of the replies was published in May 2007. These documents can be seen on the Department's website.

In November 2007 it was reported that agreement had been reached between the Council and the European Parliament on the shape of the new Regulation and this was the subject of a Communication from the Commission to the Parliament on 21st April 2008.

The new Regulation 1008/08 came into force on 1st November 2008. Among other changes the new Regulation as expected revises the rules relating to:

(a) Public Service Obligations

The regulation recognizes the possible need for a PSO when the economic development of a remote region or an island depends on it. In addition:

The maximum “concession” period when the route is restricted to one single operator has been increased from three to four years and five years for "ultra-peripheral" regions. It is hoped this will attract more competitors to submit tenders given that depreciation costs of route-specific equipment will be reduced. At the same time, the longer concession periods reduce the administrative burden on the Member States.

(b) Traffic Distribution Rules

A Member State may regulate the distribution of air traffic between airports provided :

Ground Handling

In December 2001, the European Commission appointed the SH&E consultancy group to study the impact of Council Directive 96/67/EC on the liberalisation of the ground handling market at Community airports. World News at Nottingham East Midlands Airport

World News at Nottingham East Midlands Airport

The study concerned the number of handlers at the airport, the criteria for selecting them and the consequences of the opening up of the market, especially in terms of employment, prices and ‘quality services’. The study involved visits to 33 airports and a postal survey of another 48. SH&E's Final Report** was submitted in October 2002.

A central finding of the report was that quality standards at European airports are falling and that urgent action to address this issue is required. Rather than targeting a further liberalisation of the ground handling market, any new legislation must address these problems as a first priority.

In the light of the report the Commission said it intended to issue a proposal for the revision of Directive 96/67/EC. In preparation for this the Directorate-General Energy and Transport invited Member States and stakeholders to comment on a Consultation Paper. The closing date was 1st June 2003.

There followed long period of silence and it was not until January 2007 that the Commission, as part of its ‘Airport Package', published a report on the implementation of the 1996 ground handling directive . According to the Commission's press release this "demonstrates the positive effects that the initial phase of liberalisation has had on opening up access to ground handling markets at European airports to competition and opens the door for a debate as to the next steps that need to be taken".

According to an article on Ground Handling on the Commission's website the Commission is considering the launch of a proposal to modify the present Directive. This proposal would aim at a gradual increase of competition in the groundhandling market while taking into account appropriate social protection of groundhandling staff, and at a clarification and simplification of a number of provisions where necessary.

See also ACI Europe's thoughtful article on Ground Handling in its February 2006 e-Communique

Proposed Regulation against subsidisation and unfair pricing practices in providing airline services from non-EU countries

Regulation (EC) No 868/2004, which came into force in May 2004, authorises action against unfair competition from non-Community carriers on routes to and from the Community brought about by trade-distorting third country subsidies. It also provides remedies against unfair pricing practices by state-controlled air carriers.

Computerised Reservation Systems

Computerised Reservation Systems (CRSs) provide customers with instantaneous information about the availability of air transport services and the fares for such services. They permit travel agents, whether brick and mortar or on-line, to make immediate confirmed reservations on behalf of the consumer.

The Code of Conduct for Computerised Reservation Systems (“the Code of Conduct”) was first established in 1989 with the adoption of Regulation 2299/89 on 24 July. Given that the vast majority of airline bookings were made through CRSs and that most CRSs were owned and controlled by airlines, it was felt that, in order to deal with the competition concerns arising in the supply chain of air transport products, it would be more efficient in terms of transport policy and market efficiency to develop an ad hoc regulatory framework than merely rely on the generally applicable provisions of competition law.

The Code of Conduct recognised that Computerised Reservation Systems required a certain degree of regulation in order to ensure that all airlines enjoy the same level of access to travel agents and consumers. It was established with the aim of improving transparency and preventing discriminatory behaviour both by the system vendors themselves and also by airlines, especially those which have a stake in the ownership and control of a CRS. On the one hand, system vendors were required to deal in an even-handed manner with all carriers and travel agents, while, on the other, carriers with a financial stake in a CRS were required not to favour that system over the others. The code also imposed obligations in terms of neutral display in order to avoid discriminatory treatment of airlines on the system’s principal display.

The Code of Conduct has been revised twice since 1989. Each refinement of the Code has been intended to further clarify the principles contained in the original, to address problems that have arisen subsequently and to anticipate potential difficulties. The most recent revision also established rules for the treatment of rail transport in CRSs.

Since the last change to the Code of Conduct, the airline distribution market has known important developments: most airlines have divested from their participation in CRSs – although some airlines still hold minority ownerships - and alternative distribution channels are gaining ground, mainly due to the development of direct Internet sales.

Early in 2007 the Commission embarked on a new round of consultation in relation to this Regulation. The consultation period closed on 27th April 2007 and the responses can be see on the Commission's website. In November 2007 the Commission issued new proposals to simplify and modernise the rules - see also the Commission's press release

During 2008 the proposals worked their way through the EU approval machinery and Regulation 80/2009 finally came into force on 29 March 2009

Integrated Air-Rail Ticketing

The issue of integrated ticketing arises when a passenger intends to travel using several transport modes and/or several transport operators within the same mode. Such a service requires the availability of easily accessible information on the various parts of the journey as well as the adoption of interactive reservation systems which make it possible to make reservations for the whole journey. However, information is often available only separately for each mode of transport and/or by operator. Consequently, the introduction of integrated ticketing requires the development of integrated information, reservation and sales systems.

Based on the hypothesis that integrated ticketing can be an important factor to generate demand for intermodal air-rail services, the Commission wants to examine the organisational and technical opportunities related to the sale and promotion of such services and to open a debate on a voluntary engagement of the concerned stakeholders for the development of integrated ticketing as announced in the EC Communication on passenger rights and reaffirmed in the EC Communication on airport capacity.

At the end of July 2008 the Commission launched a consultation - click here to see the consultation document. The deadline for responses was 30 September 2008. The next steps are awaited.

European Single Sky

Air Traffic Management (ATM) in Europe has traditionally been fragmented along the lines of national borders. A great deal of variation persists between neighbouring states in terms of the nature and sophistication of their ATM systems, and their procedures, equipment and training standards. This lack of uniformity has led to inefficiencies in terms of cost and and performance of the European ATM system as a whole, in the face of ever increasing air traffic growth.

In the last several decades there have been harmonisation and integration programmes launched by Eurocontrol and other international organisations aimed at making the system more uniform and seamless but lack of enforcement powers have tended to cause programme slippage and lack of consistency in implementation. This has meant that capacity-enhancements of the system have struggled to keep pace with traffic growth leading to an increasing problem of delays.

The European Commission, recognising the worsening ATM delay situation, launched its Single European Sky initiative in late 1999. Reaching agreement was very time consuming and there have been many problems to overcome, not least in matters of civil-military co-operation. It was not until March 2003 that agreement was reached in the European Council and it was only in January 2004 that the objections of the European Parliament were finally resolved through a compromise. This cleared the way for a package of four new foundation Regulations which came into force in April 2004. They are Regulation EC 549 /2004, Regulation EC 550 /2004, Regulation EC 551 /2004 and Regulation EC 552 /2004 which deal with Framework, Air Navigation Service Provision, Airspace Design and Management, and Interoperability. Further implementation measures are flowing from these.

As a prelude to this the European Commission had become a member of Eurocontrol and in 2003 a Memorandum of Co-operation was agreed between the two bodies - see Eurocontrol Press Release**. This aimed at enhancing co-operation in five areas, including the implementation of the Single European Sky. The European Commission also mandated Eurocontrol to implement functions and define operational concepts on its behalf

Single European Sky ATM Research (SESAR)

As noted above the Single European Sky initiative will mean a fundamental change in air traffic management in Europe. Working together the EC and Eurocontrol are aiming for a single European Air Traffic Management (ATM) infrastructure known as SESAR (formerly SESAME). This will “fully coordinate airspace users, operators and the supply industry and bring together the regulatory framework, funding sources and implementing actors across Europe”. The SESAR project has three phases:

The Definition Phase: The aim is to produce an ATM Master Plan for Europe defining the content, development and deployment plans of the next generation of ATM systems.

The Development Phase (2008-2013): This will produce the required new generation of technological systems and components as defined in the definition phase

The Deployment Phase (2013-2020): This will seek to build the new infrastructure both in Europe and in partner countries

The Definition Phase was launched in June 2005. It was “a collective effort, bringing together the full range of stakeholders including the manufacturing industry, airports, airlines and air navigation service providers”. The work brought about the publication November 2008 of the Air Traffic Management Master Plan which provides the roadmap for the development and deployment phases of the SESAR programme.

The Development Phase is now in progress. To give effect to the governance structure planned by the Commission to run the Development Phase - a Joint Undertaking under Article 171 of the EC Treaty – the Council on 27 February 2007 passed Regulation (EC) No 219/200

SESII

On 25th June 2008 the EC unveiled its second package of legislation for a Single European Sky (SES II). In publishing the proposals the Commission noted that the Single European Sky regulation adopted in 2004 (SES I) had not delivered the expected results in some important areas. The process of integration within functional airspace blocks (FABs), regardless of national borders, had encountered numerous hurdles. Air traffic control is mistakenly related to national sovereignty. This is a complex matter, but instead of prompting innovative solutions for exercising sovereignty, it has been used to block cross-border integration. Moreover, There has been “little progress in the overall efficiency of the design and use of the European air network”. The package is based on four pillars:

The first pillar introduces several enhancements to the original SES legislation (see IP/01/1398 ) , including binding performance targets for air navigation service providers, a European network management function to ensure convergence between national networks and a definitive date for Member States to improve performance ,initially through a cross border cooperative approach known as Functional Airspace Blocks.

The new package places environmental issues at the core of the Single European Sky and improved air traffic management should realise its potential to reduce greenhouse gas emissions from aviation. Prospective improvements are up to 10% per flight, which amounts to 16 million tons of CO 2 savings per year and a reduction of annual costs by €2.4 billion.

The technological pillar focuses on introducing better technology. The SESAR programme brings together all aviation stakeholders to develop and operate a new generation, Europe-wide air traffic management system. Its deployment will enable the safe, sustainable and cost-effective handling of twice the current traffic by 2020.

The safety pillar provides for increased responsibilities for the European Aviation Safety Agency. This would ensure precise, uniform and binding rules for airport safety, air traffic management and air navigation services, as well as sound oversight of their implementation by Member States.

Finally, the airport capacity pillar tackles the shortage of runways and airport facilities, which currently threatens to become a major bottleneck. The initiative seeks to co-ordinate better airport slots issued to aircraft operators with air traffic management measures as well as the establishment of an airport capacity observatory to fully integrate airports in the aviation network.

The legislative components of the SES II are now wending their way through the EU’s legislative system - COM (2008) 388. They are expected to come into effect later in 2009 or in 2010 at the latest.

High Level Group

Following a conference in September 2006, Vice-President Barrot created a high-level group to develop recommendations for the future of aviation regulation in Europe. Their Report was published in July 2007 - a copy of the report, and the Commision's press release about it, can be seen on the Commission's website

Airspace Classification

In May 2006 the Commission adopted an Airspace Classification Regulation which introduces a common classification for all airspace above 19,500 feet and clear rules for access to this airspace. The aim is to create a transparent framework for flights operating over European borders and facilitates access for “Visual Flight Rules” flights. The rules will also make the airspace system more understandable for foreign pilots.

Check-in at Cardiff International Airport

Insurance for Air Carriers and Aircraft Operators

The absence of legislation requiring private aircraft to have third party insurance was one of the issues raised at the 2002 Annual Meeting of ACCs at London Gatwick.

The following year in Birmingham the Annual Meeting received a paper noting that in the wake of the terrorist attacks in New York on 11th September 2001, the question of the insurance requirements for air carriers and aircraft operators was already under consideration by the European Commission [Copy of Liaison Meeting Report (MS Word 43kb)] . In September 2002 they had published a draft regulation designed to clarify the Community rules on insurance by introducing minimum insurance requirements for all aircraft flying into and out of Community airports or overflying Community territory. The proposed regulation would apply also to third-country carriers.

The UK Government supported the proposal to harmonise the insurance requirements for commercial air carriers but resisted the inclusion of private flying on the grounds that it was unnecessary. They were, however, alone in arguing for this exclusion and they were unable to sustain it. Instead they argued for more realistic limits and more sensible weight categories.

Regulation EC 785/2004, which includes a sliding scale of cover of the kind supported by the UK Government, took effect the end of April 2005. In preparation for this there were discussions between the UK Government and the CAA on the implementation and enforcement of the new Regulation. On 29th November 2004 wrote to interested bodies seeking their views on some draft UK Regulations. The consultation document can be seen on the Department for Transport's website along with a summary of the consultation responses.

Regulation EC 785/2004 requires the Commission to submit a report to the European Parliament and the Council on the operation of this Regulation by 30 April 2008. In preparation for this the Commission in mid 2007 issued a consultation paper. The closing date for comments was 22nd November 2007.

The Commission's 15 page report was issued on 24th April 2008. It concludes that in the three years since the Regulation came into force it "has been effective in ensuring insurance coverage of all aircraft operators flying within, to or from the Community. There have been very few cases of aircraft operators not complying with the insurance requirements. Civil aviation authorities from Member States reported that some third-country carriers – usually charter carriers from Central Asia – suspended their operations after the entry into force of the Regulation. The insurance market provides all air carriers and aircraft operators with the coverage required by the Regulation." The report mentions a number of issues “connected with the implementation of the Regulation which seem to need further clarification”. These are concerned mostly with insurance certificates.

Incentives to Airline Operators - the Charleroi Case

In February 2004 the Commission announced its findings on a complaint lodged in 2001 concerning the advantages granted to the airline Ryanair at Charleroi airport by Brussels South Charleroi Airport (BSCA), the airport's managing body, and the Walloon Region (Belgium).

The Commission had to determine whether the measures taken in favour of Ryanair by the Walloon Region and BSCA, a public undertaking controlled by the Walloon Region, were compatible with the "private market investor" principle. It concluded that no private operator in the same circumstances as BSCA would have granted the same advantages and accordingly that they constituted State Aid which could distort competition in favour of Ryanair. The Commission took the view, however, that some of the aid granted to Ryanair at Charleroi might be compatible with the common market in the context of transport policy, insofar as it permits the development and improved use of secondary airport infrastructure which is currently underused and represents a cost to the community as a whole. Its decision might thus allow Ryanair to keep some of the aid already granted to it. This was the aid intended for the launch of new air routes (marketing and publicity), to which may be added "one-shot" incentives, provided that the Belgian authorities complied with the conditions imposed by the Commission.

The Commission was clear, however, that some forms of aid could not be authorised and in particular:-

Ryanair challenged the findings in the European Court of Justice and on 17th December 2008 the Court annulled the Commission’s decision -see the ECJ's press release

Guidelines on financing of airports and start-up aid to airlines departing from regional airports Apron at London Gatwick

The rules lay down the conditions under which start-up aid can be granted to airlines to operate new routes from regional airports - such services says the Commission will "encourage mobility in Europe and regional development". The Commission claims the new rules will guarantee equal treatment for public and private airports and ensure that airlines receiving aid are not unduly favoured. The Guidelines also give airports and Member States guidance on the public financing of airports.

Not everyone is impressed by the new Guidelines - see Ryanair's Press Release of 6th September 2005

The UK Government has been looking at the Guidelines with some interest not least because of the impact they might have on Route Development Funds - see paragraph 4.41 of the White Paper "The Future of Air Transport" and also the report (MS Word 91kb) prepared for the ACCs Annual Liaison Meeting at Manchester Airport on 21/22 June 2006 which includes a note up-dating members on Route Development Funds. On 30th June 2006 the UK Department for Transport published rules and principles governing the operation by devolved administrations and regional development agencies of funds to provide start-up aid. It will be noted that this UK scheme has state aid approval from the European Commission.

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	Website of the Liaison Group of UK Airport Consultative Committees
	Euro Round-up

Website of the Liaison Group of UK Airport Consultative Committees