Brussels / Madrid, 29/05/2001 (Agence Europe) - European Transport Commissioner Loyola de Palacio once again attacked the fragmentation of the air transport market and the bilateral agreements concluded mainly by the United States and by nine Member States (Germany, Finland, Denmark, Italy, Sweden, Luxembourg, Belgium, Austria, UK). Speaking in Madrid on Monday, during the International Air Transport Association (IATA) general assembly, she criticised these agreements which "might have served the aviation industry well during its years of development and government control, but now that it is a mature commercial business, these agreements are increasingly out of date and ill adapted to the needs of global operators". In her view, "many of these agreements contain restrictive designation clauses, which limit the number of carriers that can be designated; with limitations on the routes and airports that can be served; and with tariff approval regimes that prohibit price competition". Along the lines of the representatives of 274 IATA member companies, that complained the sector was being fragmented thus preventing the emergence of multinational companies, Ms de Palacio noted that these agreements generally contain rules that prevent cross-border mergers and prevent airlines from establishing in other markets. She says they do not address domestic air transport markets and "thus exclude foreign competition from a large part of the total aviation market". In addition, they do not address the important question of competition rules or social and environmental rules.
In order to open up this sector, a number of international initiatives would be necessary, mainly full liberalisation of air services within the World Trade Organisation, covering ground handling services, the management of airports and leasing. One could also examine how the WTO legal framework could be used to make progress on certain fundamental rules of air transport, such as transit rights, said Ms de Palacio, although she added that she did not expect any miracles. She does feel, however, that the GATS agreements provide a better framework for global aspects of the sector.
Ms de Palacio also urged for continued regional integration, on the model of liberalisation of air transport within the EU, extended in 1992 by the agreements with Sweden and Norway, then in 1999, with Switzerland. "Other neighbouring states, for example Morocco, have expressed an interest to follow the example (…) I am positive about this development and I have asked my services to study the implications of such a development. Other States in Northern Africa and the Middle East may follow the example".
The Commission had proposed establishing a Transatlantic Common Aviation Area (TCAA) with the United States without geographical limitation or limits to market access or investment, and based on cooperation regarding competition and convergence of environmental rules, as well as security, safety, social policy and passengers' rights. "Many Community Member States have also accepted the TCAA as the right answer to globalisation. It is only institutional and legal questions that prevent them from giving the political go-ahead for negotiations to start", said Loyola de Palacio (Ed. The proposal has been blocked in Council for five years, with Ireland being the most radically opposed).