EU to revamp aviation competition law
brussels — The European Commission is set to revamp a law enabling it to impose duties on nonEU airlines or suspend their flying rights if it finds they have caused injury to European airlines, as it seeks to counter rising competition from Gulf carriers.
In a draft proposal seen by Reuters, the European Union executive aims to guarantee fair competition between airlines in the bloc by tackling such business practices by foreign airlines which cannot be addressed through open skies agreements.
These include subsidies or favourable treatment when it comes to slot allocation, ground handling services, airport charges and refuelling, among others.
The proposal is likely to stoke tensions between European legacy carriers — hit by increased competition on long-haul routes and shifting traffic flows to Asia — and the three major Middle Eastern airlines. Qatar Airways, Emirates and Etihad Airways have faced accusations of receiving illegal state subsides, which they deny.
The Commission has come under heavy pressure from France and Germany as well as their flag carriers, Air France KLM and Lufthansa, to do more to tackle the challenge posed by the Gulf airlines. Lufthansa has started cooperating with Abu Dhabibased Etihad.
Lufthansa CEO Carsten Spohr repeating last week that he rejected subsidies as he signed a catering deal and maintenance project with Etihad. The draft law would replace the current one, adopted in 2004 to counter unfair pricing practices by US airlines on transatlantic routes. It has never been used and is widely considered to be ineffective.
Under the draft proposal, an EU member state, airline or airline association will be able to submit a complaint to the Commission. —