PN090503B

EMBARGOED UNTIL 00.01

FRIDAY 9 MAY 2003

CRISIS IN WORLD AVIATION

A FULLY COMPETITIVE USA/EU AVIATION MARKET WILL BENEFIT CONSUMERS, AIRLINES AND THE ECONOMY, SAY LORDS

A report published today urges Member States to give the EU Commission a mandate to negotiate with the USA for a fully liberalised EU/USA aviation market. It also supports moves by the Commission to open up air traffic in and out of the EU to full competition between European Union airlines.

Aviation relations between Member States and the rest of the world have been in a state of flux following a series of European Court of Justice (ECJ) judgments in November 2002. The rulings affect air service agreements (ASAs) between Member States and non-EU states.

The Chairman of the Committee, Lord Woolmer of Leeds said:

"Air travel within Europe and the USA has been revolutionised in recent years. Now it's time to change the archaic restrictions on competition in air travel across the North Atlantic to allow European airlines to compete freely on transatlantic routes and within the USA.

"A fully liberalised market will allow airlines on both sides of the Atlantic to consolidate and restructure to help ensure a viable future. The UK has a strong aviation industry ready to benefit from these new opportunities.

"Passengers and freight customers will also gain from a more competitive and financially secure aviation industry."

The Committee recommends that:

  • Member States give the European Commission a limited mandate to negotiate with other countries and most immediately the USA to bring bi-lateral ASAs into conformity with Community Law as specified in the ECJ judgments.

  • Member States give the Commission a wider mandate to negotiate an Open Aviation Area with the USA.

  • It would not be in the European Union's interest or the United Kingdom's national interest to negotiate for anything short of a fully liberalised aviation market between the EU and the USA.

NOTES FOR EDITORS:

1. The members of European Union Sub-Committee B (Energy, Industry and Transport) which conducted this inquiry were:

Lord Cavendish of Furness                   

Lord Chadlington                                    

Baroness Cohen of Pimlico                   

Lord Cooke of Islandreagh                   

Lord Faulkner of Worcester                  

Lord Fearn

Lord Howie of Troon

Lord Shutt of Greetland

Lord Skelmersdale

Lord Woolmer of Leeds  (Chairman)

2. The report is published by the Stationery Office: "Open Skies" or Open Markets? The Effect of European Court of Justice (ECJ) Judgments on Aviation Relations between The European Union (EU) and the United States of America (USA). House of Lords Select Committee on the European Union, 17th Report, Session 2002-03, HL Paper 92, ISBN 0 10 400209 3, price £18.50. The full text of the report will be available on the internet via www.parliament.uk shortly after publication.

3. The basis of the Committee's inquiry was 14663/02: Communication from the Commission on the consequences of the Court Judgments of 5 November 2002 for European air transport policy.

4. The European Court of Justice handed down a series of judgments on 5 November 2002 against eight EU Member States: Austria, Belgium, Denmark, Finland, Germany, Luxembourg, Sweden and the UK.

5. 11 European Union (EU) Member States have "open skies" ASAs with the USA. The UK has a more restrictive agreement with the USA called Bermuda 2, where access to Heathrow is restricted to two airlines from each country.

6. The 15 EU Member States have around 1,500 individual air service agreements. The UK has 149 air service agreements. These agreements govern which airlines can fly where, the fares which can be charged and the times of flights, etc.

Further information from:

  • Patrick Wogan

            Clerk of the Committee, on 020 7219 5864

  • Jillian Bailey

            Press and Publicity Officer (Committees), on 020 7219 8659

[ENDS]