The European Union and the Association of Southeast Asian Nations (ASEAN) signed on 17 October a comprehensive air transport agreement that will open up more air transport opportunities and enhance direct connectivity between the two regions, while upgrading rules and standards for concerned flights.
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1. What are the benefits of the EU-ASEAN aviation agreement?
While most EU Member States have bilateral aviation agreements with some ASEAN States[1], very few have agreements with all. The more than 140 existing bilateral agreements are also very varied concerning their scope and individual rules, which harms efficiency and creates red tape. Moreover, the existing bilateral agreements do not cover essential aspects, such as fair competition, financial transparency, environmental or social issues. All are critical for improving the sustainability of aviation and for ensuring a level playing field.
The new agreement will replace all EU Member States’ bilateral aviation agreements with the ten ASEAN Member States, and provide a single, modern framework for air services between the EU and ASEAN. This will simplify the administrative requirements for operating between both regions, and improve the ability of EU and ASEAN airlines to compete for the significant traffic flows between the two regions.
Going beyond traffic rights, the EU-ASEAN agreement will provide a single set of rules, a level playing field with strong provisions for fair competition, and a platform for future cooperation on a wide range of aviation issues (safety, security, air traffic management (ATM) etc.). In particular, it includes:
- a EU fair competition clause agreed with EU Member States and stakeholders to avoid distortions of competition and abuses;
- transparency provisions to ensure obligations are fully respected;
- provisions on social matters in line with those included in EU international trade agreements, committing both sides to improving their social and labour policies and providing a forum to discuss social issues in aviation;
- a forum for regular meetings to address all issues and potential differences (joint committee meetings);
- mechanisms to swiftly resolve any dispute not resolved by the joint committee.
The agreement provides new business opportunities for European companies, and ensures fair and transparent market conditions, based on a clear regulatory framework.
2. I am an EU citizen what is in it for me?
The agreement will lead to more flight options and more competitive prices. It will ensure the highest standards for passenger safety and security and will contribute to a more economically, socially and environmentally sustainable aviation sector.
3. What possibilities does the agreement offer in terms of market access?
Following the signature of the aviation agreement, both parties will immediately be able to exercise so-called third and fourth freedom traffic rights for passenger and cargo services between any airport in the EU and ASEAN and vice versa. This constitutes a major upgrade compared to the Member States’ rather restrictive bilateral air services agreements. For many routes the aviation agreement will enable flights for the first time ever. It will link more than 100 EU-ASEAN country pairs which so far did not have a legal base for air services agreements between them.
In addition, the agreement foresees up to 14 weekly passenger flights to or from each EU Member State, operated with fifth freedom rights for passenger services, for example the option to fly from Prague to Singapore and then to Manila. The first seven frequencies will be available immediately, and the other seven frequencies two years after entry into force of the agreement, and only on routes not operated by airlines of the other party. For air cargo, EU and ASEAN airlines will be immediately entitled to operate unlimited fifth freedom traffic rights.
4. Does the agreement contain provisions on environmental protection and social matters?
The parties of the agreement have affirmed the need for urgent action to address climate change and ensure high labour standards, and agreed to cooperate in these areas.
5. Will ASEAN States need to comply with future EU aviation legislation?
While the EU-ASEAN comprehensive air transport agreement provides high regulatory standards, it does not require ASEAN to transpose EU legislation.
6. What about taxation?
The agreement allows the parties the option to apply taxes, including fuel tax, as long as they do not discriminate between carriers.
7. Will the agreement guarantee fair competition between ASEAN and EU airlines?
Guaranteeing fair competition in air transport markets is one of the EU’s key objectives when negotiating air transport agreements. There can be no open aviation markets without a level playing field.
The EU-ASEAN agreement contains strong safeguards in this respect, including provisions on fair competition. Strong enforcement mechanisms and obligations ensure financial transparency to avoid distortions of competition and abuses. Subsidisation and support for airlines is only possible in certain cases, and strict criteria apply. Detailed and agile dispute settlement procedures are also foreseen in case of disagreement between the parties.
Note
[1]: ASEAN members: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
Source: European Commission
