Operation of air services: EU rules

KEY POINTS

Operating licences and aircraft leasing

• Criteria for the award and validity of airlines’ operating licences in the EU are harmonised.
• Conditions for the award and validity of an operating licence in the EU include:
  • the possession of a valid air operator certificate (AOC) which specifies the activities covered by the operating licence,
  • ownership and control by EU countries and nationals of EU countries, and
  • meeting a number of financial conditions.
• Failure to comply with the conditions of the operating licence can ultimately result in the suspension or withdrawal of the licence.
• Leasing of aircraft registered in the EU is permitted. However, leasing of non-EU aircraft is only possible under special circumstances, for example to satisfy seasonal capacity needs. In this case, the EU air carrier in question must be able to demonstrate to the relevant competent authority that the aircraft meets all EU safety standards.

Price transparency

• Airlines are free to set the price of their intra-EU air services.
• The final price — together with the terms and conditions of carriage — of the air service must be published inclusive of all taxes, airport charges, charges and surcharges that are unavoidable and foreseeable at the time of booking. In addition, air carriers must provide a breakdown of all these unavoidable and foreseeable price elements that make up the final price.
• Optional price supplements must be communicated in a clear, transparent and unambiguous way at the start of any booking and their acceptance must be on an ‘opt-in’ basis.
• Price discrimination based on nationality or place of residence of the customer, as well as on the place of establishment of the air carrier’s agent or other ticket seller, is forbidden.
• EU countries must ensure compliance with the pricing rules; penalties for infringements have to be effective, proportionate and dissuasive.

Public service obligations

• An EU country may impose a public service obligation for a scheduled air route between an EU airport and an airport serving a peripheral or development region in its territory, or on a thin route to an airport in its territory, if ensuring minimum services on that route is considered vital for the economic and social development of the region which the airport serves.
• An EU country needs to assess the necessity and the adequacy of an envisaged public service obligation.
• In the event that no air carrier is interested in operating the route on which the obligations have been imposed, the country concerned may restrict the access to the route to a single air carrier for a period of up to 4 years and compensate its operational losses resulting from the public service obligation. The selection of the operator must be made by public tender at EU level.

Distribution of air traffic between airports

EU countries may regulate the distribution of air traffic between airports provided in particular that:

• they serve the same city or conurbation,
• they are served by adequate transport infrastructure and are linked to one another and to the city or conurbation they serve by frequent, reliable and efficient public transport services,
• the decision to regulate the distribution of air traffic respects the principles of proportionality and transparency, and is based on objective criteria.

COVID-19 — special measures

Regulation (EU) 2020/696 and Commission Delegated Regulations (EU) 2020/2114 and 2020/2115 temporarily amend Regulation (EC) No 1008/2008 to help airlines and airports to cope with the sharp fall in air traffic caused by the COVID-19 pandemic.

These regulations:

• temporarily amend the rules on the licensing of air carriers in the event of financial difficulties due to the COVID-19 pandemic. They temporarily suspend the obligation for EU countries to suspend or revoke the operating licence of any carrier that is facing financial difficulties or to replace it with a temporary licence, provided that safety is not at risk. This will avoid creating unnecessary administrative burdens for authorities and air carriers;
• introduce a temporary derogation from the procedures that apply when EU countries want to refuse or impose conditions on the exercise of traffic rights in order to deal with emergency situations of short duration. EU countries may temporarily maintain an emergency measure in place for a period longer than 14 days but such a measure may only remain in force as long as there are clear public health risks related to the pandemic. Any emergency measures must respect the principles of proportionality and transparency and be based on objective and non-discriminatory criteria;
• introduce new temporary rules on the provision of ground handling services to help airports to continue their activities in the context of the COVID-19 outbreak:
  • by allowing airports to prolong the existing contracts of ground handling suppliers until 31 December 2022, and
  • in the event of the bankruptcy of a ground handling company, by allowing the airport to directly choose a new provider of ground handling services for a maximum period of 6 months or until 31 December 2021.