European Union–United States aviation agreements

KEY POINTS

Market access: traffic rights and commercial/operational matters

• The agreement allows EU airlines to:
  • operate flights to the United States from any EU airport, regardless of their place of establishment within the EU (community carrier concept);
  • operate international routes between the EU and the United States (third¹ and fourth² freedom rights), and routes beyond the EU and the United States (fifth freedom rights³), without restrictions on the number of flights or type of aircraft;
  • operate unlimited seventh freedom⁴ cargo services (although there will be no additional seventh freedom all-cargo rights for US airlines on top of those previously granted by eight EU Member States);
  • operate limited seventh freedom flights for passenger services between the United States and any point in the European Common Aviation Area⁵ (ECAA) although no such rights are given to US airlines.
• The agreement enables free pricing (although US carriers cannot set prices on EU routes within the EU) 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 two or more airlines may share the same flight) and new opportunities for EU airlines to provide aircraft with crew (known as wet leasing) 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 United States of any EU airline owned or controlled by EU or ECAA citizens.
• Non-EU airlines guarantee:
  • unilateral acceptance by the United States 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 two 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 that 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 environmental protection and intentions for enhanced technical cooperation to reduce air transport emissions and improve fuel efficiency.

The agreement also includes 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 United States 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, particularly, the environment, on which both sides agreed on a dedicated joint statement.

Norway and Iceland acceded to the agreement in 2011.