Brussels, 12/03/2004 (Agence Europe) - On Friday, the European Commission welcomed the positive reception by the European Parliament to the agreement reached at the Transport Council on combatting unfair competition from subsidised third country airlines (see p. 13). The agreement fills the legal vacuum to react against unfair competition from subsidised third country competitors in the airline sector, since unlike in the US< there are to date no arrangements at Community level for measures to counteract unfair pricing in air transport. Bilateral agreements cover virtually no measures to counter unfair competition and no multilateral rules have yet been adopted. The regulation will come into force 20 days after the date of publication in the Official Journal (expected in the next few weeks) and will address subsidies and also unfair pricing practices by third country competitors resulting from non-commercial advantages granted by their authorities. The regulation proposes to allow the imposition of duties on those air carriers from third countries benefiting from subsidies. The duties will be calculated on the basis of the amount of aid granted to those airlines but will not be higher than necessary to remedy the damage caused to Community carriers. If the third country carriers are state-controlled, duties can also be imposed to offset any unfair pricing practices resulting from other non-commercial advantages granted by governments. Transport Commissioner Loyola de Palacio hailed the agreement: "This is a very important agreement for our airlines which will be put on an equal footing with their competitors in the future: the new instrument gives possibilities to react against very unfair practices." she said. "In the European Union, our airlines have to 'play it by the book' while it can happen that third country competitors on international routes in the air transport market are not always subject to similar fair trade rules. These new rules, when adopted, will fill the legal gap".
Application of the regulation will be set in motion by a complaint from the air transport industry (e.g. an airline) or on the initiative of the European Commission. Following this complaint, the Commission will publish an opinion in the Official Journal and begin its enquiry. An out-of-court settlement may be found at any time with the third country in question, particularly as that country will be asked to submit its comments before the enquiry is continued.