Abstract
This article is about European Union (EU) Regulation 868 of 2004. It outlines EU rules on subsidy and state aid prior to 2001 and explains how Regulation 868 was a response to the events of September 2001. Regulation 868 is examined, focusing on the definition of subsidy and unfair pricing, the issue of non-commercial advantage and the determination of material injury to the Community air industry. Finally, the article considers the actual effectiveness of the Regulation, calls from the European airline industry for its revision and pragmatic alternatives using air services agreements (ASAs).
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