In the “aviation” package the European Commission will be presenting on Thursday 8 June, the Commission is proposing to revise regulation 868/2004 on the protection of EU aircraft handlers against subsidies and unfair tariff practices by third country operators.
The aim of the revision of this regulation is to make the protection of EU airlines more effective as envisaged by Union institutions when the text currently in force was adopted. Nonetheless, having seen the draft revision text, which EUROPE was able to consult, the Commission recognises that the Union does not currently possess, “an effective instrument for ensuring fair competition between Union and third country handlers”.
Firstly, it would appear that the definition of the suspect practices will be revised with this new regulation. The Commission acknowledges that apart from the subsidies granted by a third country, regulation 868/2004 exclusively applies to “unfair tariff practices” and the unfair nature of these practices is difficult to prove. The regulation has never been used for awarding compensation to an EU handler that has been unfairly undercut, either. The revised regulation is expected to help incriminate “practices affecting competition” and therefore incorporate the subsidies received by a third country handler, as well as any other discriminatory measure affecting other handlers. “Practices affecting competition” have to be demonstrated as a practice that affects competition by a third country state or handler and that with regard to the damages suffered by an EU handler, there is a connection between the cause between the practice and the damages suffered.
Moreover, under the terms of the rules that will be proposed by the European Commission on 8 June, the Commission is expected to initiate a procedure on the basis of a complaint from a member state, EU handler, association representing EU airline handlers or its own initiative, if there is prima facie proof of a violation of international obligations or a practice affecting competition.
As part of regulation 868/2004, a member state cannot submit a complaint to the Commission, which would therefore constitute another change.
On this basis, although the Commission considers that the proof is sufficient for considering that there is “a practice that affects competition” it would have to open an investigation procedure in order to determine whether an international obligation has effectively been breached or if there is an anti-competitive practice causing damage or which could cause damage to the handler in question.
Finally, another major change involves penalties against third country handlers. In the future text, they would take the form of financial sanctions or “any other measure” that could have the same effects. The European Commission would therefore have envisaged the suspension of concessions or rights to the incriminated company, whilst respecting the proportionality principle and without breaching the bilateral agreement signed with third countries in the aviation transport domain, although in regulation 868/2004, the retaliation measures envisaged only take the form of “taxes imposed on the third country handler”.
Three other texts presented. The revision of regulation 868/2004 is not the only text to be unveiled by the European Commission on Thursday 8 June. The Commission is expected to present initial guidelines on the ownership and control of aircraft and the latter on the public service obligations of aviation, both under Regulation 1008/2008. A working paper on the continuity of air traffic in the European Union will also be published. (Original version in French by Lucas Tripoteau)