EU plans airline industry shake-up
(BRUSSELS) - The EU will get tougher rules to ensure fair competition and protect its airline companies as it seeks to boost an industry vital to the wider economy, the European Commission said Thursday.
"Archaic ownership and control restrictions" must also go as part of an international effort so as to ensure airlines get easier access to needed new capital, EU Transport Commissioner Siim Kallas said in a statement.
The European Union would negotiate "new and more effective EU instruments to protect European interests against unfair practices," he said.
Standard "fair competition clauses" would be included in current bilateral air services agreements between EU and non-EU countries, he added.
Most countries apply control restrictions -- foreign ownership in US airlines is limited to 25 percent and in the EU 49 percent -- but these deny carriers access to new capital and prevent consolidation, Kallas said, adding: "It is now time to address this issue more vigorously."
Kallas said European aviation had suffered badly in the economic downturn and it needed a shake-up to make it more competitive given the rise of fast growing airlines in Asia and the Middle East targetting a global market.
"We urgently need a step change. Faced with the dramatic changes in global aviation, Europe must respond and adapt rapidly or be left behind," he said.
To help carriers access to new markets, the commissioner said he wanted to negotiate EU-level air service agreements with countries such as China, Russia, the Gulf States, Japan, India and southeast Asian countries.
In addition, accords were needed with neighbouring countries such as Ukraine, Azerbaijan, Tunisia, Turkey and Egypt, Kallas said, claiming the agreements would produce annual benefits of 12 billion euros ($15.4 billion).
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