The European Commission is seeking to amend a European parliament regulation concerning unfair pricing practices and subsidisation by non-EU carriers, reports Reuters. The revamp is thought to be in response to the rising prevalence of Gulf carriers in the European aviation market and is part of the EU's Aviation Strategy for Europe.
Regulation 868/2004 was formulated in the wake of the September 11 attacks, when a downturn in air transport led to US airlines receiving USD3 billion in state aid. Under the European constitution, state aid is unlawful unless it has been exempted. The regulation allows the EU to impose duties on non-EC airlines which receive state subsidies. However, the process can only be invoked following a complaint from players within the aviation industry. A road map to reform the regulation was begun in 2013, which confirmed that no complaint has ever been lodged.
According to the Reuters report, the regulation will be strengthened to fight illegal government subsidies, slot allocation advantages, and privileges regarding airport charges and ground handling fees. The 2013 road map indicates that for the regulation to be effective, it would be necessary to know the financial data of third party airlines to determine if illegal subsidies are being handed out.
The European Parliament on February 2 issued a statement welcoming a review of the regulation, saying that it is currently "neither adequate nor effective". It also adds that a trend towards protectionism would be unacceptable.
"Competition from third countries, if fair, should be seen as an opportunity to develop further an innovative European aviation model," the statement says.
European and US airlines have long fought against Gulf carrier 'illegal' subsidies, which are said to be as much as USD42 billion since 2004. Qatar Airways (QR, Doha Hamad International), Emirates (EK, Dubai International) and Etihad Airways (EY, Abu Dhabi International) have consistently denied the accusations.
