EU to address competition concerns in Gulf aviation agreement

BRUSSELS (Reuters) – The European Commission said on Friday it will address French and German concerns over what they see as unfair subsidies to Gulf carriers when it proposes a commercial aviation agreement with the Gulf region later this year.

At a meeting of European Union transport ministers on Friday, France and Germany asked the Commission to look at an aviation agreement with Gulf carriers - such as Emirates and Etihad - as a way to stop European airlines losing market share to their Middle East competitors.

Any commercial flying agreement including the granting of air traffic rights to foreign carriers should be accompanied by provisions allowing member states to monitor potential illegal subsidies and unfair competitive practices, French transport minister Alain Vidalies said in a statement.

"Aviation is very much challenged by competition right now and we need to address it in a more comprehensive way," said Violeta Bulc, EU Transport Commissioner.

In a letter to France and Germany, seen by Reuters, Bulc said she supported their initiative and would address it as part of an aviation package due to be presented later this year.

"There are indications that the state support leads to an advantage ( for Gulf carriers) compared to European airlines," said Alexander Dobrindt, Germany's transport minister.

"The benefit of an aviation agreement for us could be to get equal opportunities and for the Gulf carriers that there is the possibility, if there is an equal opportunity again, to talk about new landing rights."

On Feb. 12 the French and German transport ministers sent a letter, seen by Reuters, to Bulc asking her to negotiate an air transport agreement with Gulf countries that would require the "financial transparency of the various entities involved".