EU Aviation Scene: Major Developments December 2007 — June 2008

Abstract

This article gives an overview of the major developments on the EU aviation scene between 1 December 2007 and 30 June 2008. In particular: — There were important EU external aviation policy developments during the period under review. The main development was the coming into force of the EU/US Open Skies Agreement. In addition, the Commission has continued its drive to conclude a number of horizontal air services agreements. — Partly as a result of the EU/US Open Skies Agreement and partly due to other economic factors including, in particular, the worsening economic climate,rocketing fuel prices and overcapacity (especially in the US), a number of consolidation transactions were announced (mergers or integrated alliances) during the period under review. They include the Delta/Northwest merger and the alliance arrangements between Continental, United Airlines and a number of other Star Alliance carriers. American Airlines and British Airways were also rumoured to be preparing another application for antitrust immunity (the two earlier applications failed). — There were also a number of other important competition law developments.The Commission continued its vigorous pursuit of infringement proceedings against carriers that have allegedly participated in illegal cartel behaviour. The battle between Aer Lingus and Ryanair also continued to rage, with Aer Lingus failing to obtain interim measures from the Court of First Instance stopping Ryanair from exercising voting rights linked to its minority shareholding in Aer Lingus. — There was a lot of activity in the State aid field during the period under review.There were certain noteworthy developments in the various ongoing Olympic investigations, while the loan granted by the Italian government to Alitalia also came under scrutiny. The Commission launched a number of investigations into start–up aid granted to Ryanair at a number of regional airports, which the Commission considers may be incompatible with the EU State aid rules. Finally,Ryanair also continued its fight trying to protect its business model, with developments in Ryanair’s appeal against the Commission’s Charleroi decision and the launch of proceedings against the Commission for alleged failure to act with regard to two complaints Ryanair submitted against alleged illegal airport aid granted to Lufthansa and Air France. — Finally, there were a number of important regulatory developments during the period under review, including (a) the European Parliament’s first reading of the Commission’s proposal for a new CRS Code of Conduct; (b) the adoption by the Commission of a Communication providing its views on a number of issues resulting from the review process of the present Slot Code of Conduct; (c) the adoption by the Council of Ministers for the Environment of a common position with regard to the Commission’s proposal to include aircraft emissions in the EU Emissions Trading Scheme; and (d) the publication by Consumer Commissioner Kuneva on the interim results of a crackdown on misleading aviation websites. Each of these points will be examined in greater detail in the sections below.