EU Aviation Scene: Major Developments July 2008–November 2008

Abstract

This article gives an overview of the major developments on the European Union aviation scene between 1 July 2008 and 30 November 2008. In particular: – The consolidation drive continued unabated. In addition to the alliance arrangements between Continental Airlines, United Airlines, and a number of other Star Alliance carriers announced in June 2008, American Airlines, British Airways, and Iberia made public in August 2008 that they had also applied for an antitrust immunity of their proposed alliance. The European Commission opened ex officio investigations into both alliance arrangements. During the period under review, the European Commission also cleared the Delta Airlines/Northwest Airlines merger, started an investigation into Lufthansa’s proposed acquisition of a 45% stake in SN Holding, the parent company of Brussels Airlines, and decided to open an in–depth investigation into the KLM/Martinair merger. Other transactions that were mentioned in the press include Lufthansa’s acquisition of a majority ownership of bmi British Midland, and its intention to acquire control of Austrian Airlines, which is being privatized by the Austrian Government. British Airways is in merger negotiations with Iberia and it is rumored that Air France/KLM may still end up acquiring a (majority) stake in Alitalia. – There have been major developments in the State aid field during the period under review. The European Commission and the European Court of First Instance adopted important decisions with regard to Alitalia, and there have been further developments in the Olympic State aid matter.The European Commission also adopted State aid measures in a number of other aviation–related cases – There were a number of noteworthy regulatory developments during the period under review, most importantly the publication in the Official Journal of the new regulation on the internal market for air transport, which brings together in one single legal instrument the three 1992 regulations that hitherto formed the pillars of the internal aviation market and that controlled (1) the licensing of air carriers, (2) the access of European Union carriers to intra–European Union routes, and (3) the fares and rates for air services. There were also further developments regarding the proposal for a new CRS (computerized reservation system) Code of Conduct. In addition, a Directive extending the European Union Emission Trading Scheme to aviation was finally adopted, and the European Court of Justice adopted a ruling on the interpretation of the concept of ‘flight’ for the purposes of the application of Regulation 261/2004 on compensation and assistance in the event of denied boarding, cancellation, and long delay – Finally, with regard to the European Union external aviation policy, the European Commission published a report on its progress toward the creation of a Common Aviation Area (CAA) with the neighbouring countries by 2010. There were also further developments regarding the negotiation or conclusion of horizontal air services agreements with third countries. Each of these points will be examined in greater detail in the sections below.