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EU–US aviation agreements

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EU–US aviation agreements

 

SUMMARY OF:

Decision 2007/339/EC on the Air Transport Agreement between the EU and its Member States and the United States of America

WHAT DOES THIS DECISION DO?

  • With this decision, the European Union (EU) approves the signature of the Air Transport Agreement negotiated with the United States of America.
  • The agreement provides for all transatlantic routes to be opened up to EU and US airline companies.
  • It also includes an arrangement to develop the agreement further on matters such as airline ownership and control.

KEY POINTS

Market access: traffic rights and commercial/operational matters

  • The agreement allows EU airlines to:
    • operate flights to the US from any EU airport, regardless of their place of establishment within the EU (‘Community carrier’ concept);
    • operate international routes between the EU and the US (3rd* and 4th*freedom rights), and routes beyond the EU and the US (5th freedom rights*), without restrictions on the number of flights or type of aircraft;
    • operate unlimited 7th freedom*cargo services (although there will be no additional 7th freedom all-cargo rights for US airlines on top of those previously granted by 8 EU countries);
    • operate limited 7th freedom flights for passenger services between the US and any point in the European Common Aviation Area (ECAA)* (although no such rights are given to the US airlines).
  • The agreement enables free pricing (although US carriers cannot set prices on intra-EU routes) and contains detailed rules on franchising and branding to allow EU airlines to extend their network presence in the US market.
  • It also allows for unlimited code-sharing (where 2 or more airlines may share the same flight) and new opportunities for EU airlines to provide aircraft with crew (by wet-lease arrangement) to US airlines on international routes.

Market access: ownership and control

  • US airlines guarantee:
    • permissible percentage ownership by EU nationals, including the possibility to exceed 50% of total equity;
    • fair and expeditious consideration of transactions involving EU investment in US airlines.
  • EU airlines guarantee:
    • The right to limit US investments in EU airlines to 25% of voting shares (mirroring the US system);
    • acceptance by the US of any EU airline owned or controlled by the EU or ECAA citizens.
  • Non-EU country airlines guarantee:
    • unilateral acceptance by the US of EU ownership and control of any airline in the European Economic Area, the ECAA and 18 African countries.
  • The Joint Committee that is established by the agreement has a role in matters concerning ownership and control.

Regulatory cooperation

The agreement also strengthens cooperation between the 2 parties in the following areas.

  • Security: working towards compatible practices and standards and minimising regulatory divergences in security measures.
  • Safety: improved consultation and cooperation in the event of safety concerns on either side.
  • Competition policy: commitment to cooperate in the application of competition regimes to agreements which have an impact on the transatlantic market and to promote compatible regulatory approaches to agreements.
  • Government subsidies: recognition that these may affect airlines’ ability to compete fairly and equally, and the need for arrangements allowing concerns about subsidies to be raised.
  • Environment: recognition of the importance of environment protection and intentions for enhanced technical cooperation to reduce air transport emissions and fuel efficiency.

The agreement also included a clear roadmap laying out a non-exhaustive list of ‘items of priority interest’ for the negotiation of a second-stage agreement.

Second-stage agreement

Further negotiations between the EU and the US were launched in 2008 and resulted in the signature of a second-stage agreement in 2010. This protocol builds on the first agreement and covers additional investment and market access opportunities. It also strengthens the framework for cooperation in regulatory areas such as safety, security, social aspects and, in particular, the environment, where both sides agreed on a dedicated Joint Statement on the Environment.

Norway and Iceland acceded to the agreement in 2011.

FROM WHEN DOES THE DECISION APPLY?

The decision has applied since 25 April 2007. Article 25 of the Air Transport Agreement on provisional application indicates that the parties agree to apply it from 30 March 2008.

BACKGROUND

Prior to the 2007 agreement, air transport relations with the US were governed by bilateral agreements between EU countries and the US. 16 EU countries already had ‘open skies’ agreements in place. However, this fragmented approach proved to be an obstacle as it prevented completion of a genuine single market.

In 2002, the Court of Justice of the European Union handed down judgments in cases referred to it by the European Commission (C-466/98, C-467/98, C468/98, C-469/98, C-472/98, C-475/98 and C-476/98). These clarified the sharing out of the external competences between the EU and EU countries and clarified certain issues concerning freedom of establishment.

As a result, the Commission received an authorisation to negotiate an air agreement with the US that applied for the EU as a whole.

For more information, see:

* KEY TERMS

3rd freedom rights: in respect of scheduled international air services, the right or privilege, granted by one country to another, to put down, in the territory of the first country, traffic coming from the home country of the carrier.

4th freedom rights: in respect of scheduled international air services, the right or privilege, granted by one country to another, to take on, in the territory of the first country, traffic destined for the home country of the carrier.

5th freedom rights: in respect of scheduled international air services, the right or privilege, granted by one country to another, to put down and to take on, in the territory of the first country, traffic coming from or going to a non-EU country.

7th freedom rights: in respect of scheduled international air services, the right or privilege, granted by one country to another, of transporting traffic between the territory of the granting country and any non-EU country. This does not require the service to connect to or be an extension of any service to/from the home country of the carrier.

European Common Aviation Area: includes the EU countries, Albania, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Iceland, Montenegro, Norway, Serbia and the United Nations Interim Administration Mission in Kosovo.

MAIN DOCUMENT

Decision 2007/339/EC of the Council and the Representatives of the Governments of the Member States of the European Union, meeting within the Council of 25 April 2007 on the signature and provisional application of the Air Transport Agreement between the European Community and its Member States, on the one hand, and the United States of America, on the other hand (OJ L 134, 25.5.2007, pp. 1-3)

RELATED ACTS

Decision 2010/465/EU of the Council and the Representatives of the Governments of the Member States of the European Union, meeting within the Council of 24 June 2010 on the signing and provisional application of the Protocol to Amend the Air Transport Agreement between the United States of America, of the one part, and the European Community and its Member States, of the other part (OJ L 223, 25.8.2010, pp. 1-2)

Protocol to amend the Air Transport Agreement between the United States of America and the European Community and its Member States, signed on 25 and 30 April 2007 (OJ L 223, 25.8.2010, pp. 3-19)

Decision 2011/708/EU of the Council and of the Representatives of the Governments of the Member States of the European Union, meeting within the Council of 16 June 2011 on the signing, on behalf of the Union, and provisional application of the Air Transport Agreement between the United States of America, of the first part, the European Union and its Member States, of the second part, Iceland, of the third part, and the Kingdom of Norway, of the fourth part; and on the signing, on behalf of the Union, and provisional application of the Ancillary Agreement between the European Union and its Member States, of the first part, Iceland, of the second part, and the Kingdom of Norway, of the third part, on the application of the Air Transport Agreement between the United States of America, of the first part, the European Union and its Member States, of the second part, Iceland, of the third part, and the Kingdom of Norway, of the fourth part (OJ L 283, 29.10.2011, pp. 1-2)

last update 18.12.2016

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