Market Opening

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EUROMED AVIATION PROJECT AIR TRANSPORT
SEMINAR Amman (Jordan), 1718 October 2007
Market Opening Corollary issues Towards a
Common Aviation Area
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Euro Mediterranean Aviation Agreements

• Areas of cooperation
• under a possible EUROMED global aviation agreement

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Economic regulation

• Traffic rights
• - First and second
• - Third and fourth
• - Fifth
• - Other rights?
• Scheduled/Non-Scheduled
• Passenger/cargo

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Economic regulation

• Ownership and control increased possibilities
  for investment in air carriers

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Economic Regulation

• Competition
• Mergers
• Anti-trust
• Exemption of airline alliances
• State aid
• Regulatory convergence principles, procedures,
  consultation
• Security costs

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Aviation Safety

• Highest possible standards
• Mutual recognition (certificates, crew licences,
  maintenance)
• Exchange of data on accidents/incidents/SAFA

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Aviation Safety

• Cooperation with EASA
• List of unsafe airlines

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Aviation Security

• Regulatory convergence
• Eventually Mutual recognition leading to
  one-stop security
• Cooperation in developing technology and research
• Cooperation towards other countries

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Air Traffic Management

• Single Sky framework
• Single Sky Committee
• Functional Airspace Block
• Interoperability
• Eurocontrol

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Industrial cooperation

• SESAR
• Maintenance
• Research

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International organisations

• Cooperation in international organisations
• ICAO safety, security, economic regulation,
  cooperation projects etc.
• ECAC
• WTO
• etc.

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Phases

• Phased approach
• Duration and milestones agreed by the Parties
• Agreed Calendar must be complied with (phases are
  not optional)
• Safeguard clauses

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Technical Co-Operation An Important Tool

• Technical co-operation important
• Ensure level playing field
• Promote common high regulatory standards
• EU industrial interests all EU stakeholders
  should work together (as EU Inc.)
• Technical co-operation/assistance should
• Drive and support general policy
• Support regulatory convergence and removal of
  obstacles
• ATM, safety, security, doing business, airports
• Lead towards mutual recognition of practices and
  standards

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Corollary Issues

• Other Areas of cooperation

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Revision of the Third Package

• 10 years after the full entry into force of the
  third package, the Commission wished to take
  stock of the application of the package.
• Some measures have become obsolete, while others
  are poorly applied or need to be clarified.
• Simplify and consolidate legislation.
• Ensure homogeneous application of Community
  legislation, especially with regard to the
  monitoring of the operating licence.
• Ensure consistency between the internal aviation
  market and its external dimension.

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Revision of the Third Package

• Proposal presented 18th July 2006
• Council General Approach adopted 8th June 2007
• European Parliament first lecture 11th July 2007
• Proposal still under discussion

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Rev. 3rd PackageCode-sharing

• General Principle freedom to combine
  air-services or to enter into code-share
  arrangements
• But under a strict principle of reciprocity
  Member States can introduce restrictions if
  carriers licenced by them have no access to
  similar commercial opportunities

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Rev. 3rd Package Aircraft Leasing

• Community air carriers should not be "excessively
  dependent on using wet-leased aircraft".
• Lease agreements subject to prior approval by the
  national civil aviation authority.
• Wet-leasing aircraft registered in a third
  county, conditions
• a) meeting safety standards equivalent to
  Community and national requirements
• b) Three possibilities
• exceptional economic needs (7 months renewable
  once),
• seasonal capacity needs (renewable without
  restrictions), or
• operational problems (approval may be granted for
  limited duration).

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Rev. 3rd Package Aircraft Leasing

• The approval for wet-leasing non-EU aircraft may
  be refused if the third country where the
  aircraft is registered does not provide
  reciprocity as regards wet leasing.
• Member States concerned by operations of
  wet-leased non-EU aircraft must be informed.

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Airport Charges

• Community law applicable to Airports already
  exists (slots, groung-handling, SES/SESAR)
• Context is evolving Rapid growth of traffic
  Capacity v. Demand Economic changes (Airlines /
  Airports)
• Facing the capacity crunch
• 2025 could see up to 2.5 times the 2003 traffic
• In 2025, 60 airports could be heavily congested,
  and the top 20 airports could be constrained 8-10
  hrs. per day
• Only 25 of airport would have a possibility to
  add new runways in the next 20 years

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Airport Charges

• Air Carriers complain about
• High airport charges
• Monopolistic airports
• Lack of transparency
• Lack of consultation
• Take-it-or-leave-it attitude
• Competition rules of EU Treaty difficult to
  apply difficult to establish proper cost basis
  for every EU airport.
• Commission proposals in 1990 and 1997 were not
  successful.

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Airport Charges

• Communication An action plan for airport
  capacity, efficiency and safety in Europe
• Five principal measures to accommodate traffic
  growth in an environmentally sustainable manner
• to optimise the use of existing capacity
• to provide a coherent approach to air safety
  operations at aerodromes
• to promote "co-modality"
• to improve the environmental capacity of airports
  and the planning framework of new airport
  infrastructure and
• to develop and implement cost efficient
  technological solutions.
• 2007 Proposal for a directive on airport charges

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Groundhandling

• Council Directive 96/67/EC of 15 October 1996
• First step in gradual opening of access to
  groundhandling markets
• Opens up groundhandling services unless specific
  constraints of space or capacity exist in an
  airport
• At the larger EU airports access to the market by
  suppliers of groundhandling services is free
• for certain categories of services the number of
  suppliers may be no fewer than two for each
  category of service
• At least one of these suppliers should be
  entirely independent of the airport or the
  dominant air carrier at that airport
• Similar provisions exist with regard to
  self-handling,

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Groundhandling

• The Commission is engaging in a revision process
  of the Directive
• Stakeholders expressed the need for
• Simplification
• Clarification
• Possibility to further market opening and some
  regulation (insurance, quality standards)

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Revision of the Slots Regulation

• Regulation (EEC) 95/93 as amended by Regulation
  794/2004 technical modifications.
• 2004 Study by NERA on Commercial slot
  allocation mechanisms.
• 2004 Consultation paper by the EC - Responses by
  stakeholders.
• Options
• Secondary trading between air carriers
• Primary trading of new slots
• Primary trading of withdrawn slots
• Aim
• More efficient use of airport capacity not
  higher costs for air carriers.

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State Aid

• financing of airports and start-up aid to
  airlines departing from regional airports
• 2005 Guidelines (not legally binding, but explain
  how State Aid rules are applied to Airports)
• Aids limited in time, targeted, for smaller
  airports

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Environmental issuesThe EU Approach

• To fight against climate change is on the top of
  political agenda
• Need for a comprehensive approach including
• Better use of existing infrastructure
• Research Development
• ATM / SES
• Market-based measures (ETS)
• Within a global framework

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Technical Assistance

• The EC is willing to provide any technical
  assistance that may be needed
• The assistance is generally provided on bilateral
  basis
• But assistance of regional basis also exists
• Importance of the Neighbourhood framework
• The contents can be agreed, initiative on the
  part of the MEDA Country
• Key objective in air transport Reinforcement of
  the capacities of the CAA