An efficient air transport system is vital for the success of Transatlantic
economic relations. It enables our companies to do business, and goods
and services to flow freely from country to country. And in recent
years the European Union has made
considerable progress in achieving greater efficiency. Since the EU
aviation market was opened up in 1993, it has become as dynamic as
the U.S. market. The same trends are under way on both sides of the
Atlantic the growth of low-cost airlines and alliances and
mergers between traditional companies. The European Union now faces
five main challenges:
First, the establishment of the European Air Safety Agency in 2002
illustrates the European Union’s desire to ensure uniform safety
standards and to simplify regulations by replacing 25 national procedures
with a single system. We are seeking
to establish cooperation between the U.S. Federal Aviation Administration
and the European Air Safety Agency to further simplify the life of
manufacturers and carriers, while uaranteeing a high level of safety.
Our aim is to obtain a specific agreement on safety between Europe
and the United States.
Second, in the air traffic management sector, the European Union’s “single
sky” legislation, adopted in 2004, has launched an ambitious
program to restructure our airspace and make its use more efficient.
Here again, as we modernize our air traffic management systems, we
are discussing ways of improving cooperation with the United States.
Third, we want to make our air transport system more efficient, above
all by making better use of our infrastructure. This will involve further
liberalization of ground handling services; careful examination of
our airport
capacity and charges; new rules for allocating slots; and a general
simplification of our regulations. This reform will benefit not only
European airlines and
passengers, but also American and
foreign companies that use our airports.
Fourth, we must continue to ensure that our rules on state aid and
competition are strictly applied, and that aid
is only used for the restructuring of companies. We believe this will
foster sustainable growth in the European
aviation sector. How do you tell companies that are good performers
that their competitors are surviving thanks only to the generosity
of governments? It is no secret that the financial support received
by U.S. airlines is a cause of concern for European companies that
compete with them.
We have told our American colleagues that we want a constant, frank
and transparent dialogue about state aids, because they distort the
market. After all, the Commission has to ask EU member states to end
state aids when the aim is not to restructure an airline but simply
to ensure its survival. This practice cannot continue, whether in the
European Union or the United States.
Fifth, adequate protection is needed for consumers. I recently launched
a proposal to increase protection for
passengers with reduced mobility. The United States is also developing
rules on these issues and we must make sure our standards do not conflict.
Passengers should also have the right to know the names of the companies
carrying them.
At the wider international level, the rules governing civil aviation
are outdated. In today’s world economy, international aviation
is too embedded in national law, making life unnecessarily complicated
for airlines. There is a broad consensus among airlines and aviation
organizations in favor of reforming the rules of international aviation.
In March 2005 the Commission adopted an ambitious agenda for
Europe’s external relations in the field
of aviation. The first aim is to create a common airspace with Europe’s
neighbors in the Mediterranean and along our eastern border by 2010.
This will require common rules on safety and security and will create
new economic opportunities throughout the region. The Commission is
currently negotiating air agreements with Morocco and the countries
of the western Balkans.
“We also want to negotiate agreements with Russia and China”
Secondly, the Commission is recommending negotiations for unprecedented
and significant air agreements with China and Russia. Three quarters
of all passenger traffic from Russia is bound for the European Union,
while China, with its great potential for growth, is opening up its
air market. We also hope that the preliminary pacts we have negotiated
with New Zealand and Chile will provide the basis for more ambitious
agreements.
The Commission wants to open up world markets gradually and fairly.
This strategy is clearly in the interests of the European economy and
of passengers and air carriers in Europe. Europe’s
capacity to build new markets, in relationships of trust with its partners,
should also provide a major boost both to air traffic worldwide and
to the modernization of the international rules on aviation.
In this context, our relations with the United States are paramount.
The United States and Europe are each other’s leading aviation
partners. A study carried out for the Commission in 2002 estimated
that an open Transatlantic
aviation area would generate some 17 million extra passengers a year
and
consumer benefits of over $5 billion a year, not to mention new jobs
on both sides of the Atlantic. That is why the Commission is seeking
to lend new
impetus to negotiations on an overall air agreement with the United
States.
Although we have devoted an intense amount of work to the effort, we
have so far proved unable to conclude even a first-step agreement.
“The U.S. Congress
is wrong to fear
loss of control
in times of crisis
such as war”
There are basically three issues at the heart of these negotiations,
the first of which is regulatory cooperation. We have to make sure
that American and European rules affecting airlines, and therefore
passengers’ journeys, neither conflict nor diverge. We do not
want a single, uniform set of rules, but we do need to agree on better
cooperation.
The second issue is market access. We have both seen the positive results
of deregulation in our own markets. It is only logical that we should
now pursue the route of greater deregulation
between our markets.
The third priority is to relax the rules preventing the creation of
open aviation markets and hampering
economic and business development. We need to do away with the rules
that are constricting the growth of the aviation sector. I firmly believe
that there is no
alternative to the conclusion of an agreement between the world’s
two largest aviation partners.
It is a great paradox that aviation, which is the most efficient instrument
of globalization, is also subject to continuing governmental restrictions.
U.S. capital cannot really be invested in European airlines, and the
United States imposes limits on European investment. This is a serious
problem that we have to overcome. We have to work toward allowing American
airlines to own European
airlines or to establish themselves in
Europe and vice versa.
The U.S. Congress is reluctant,
because it believes that foreign ownership of American airlines would
mean a loss of control over aircraft in times of crisis, such as war.
There is concern that the federal government would not be able to mobilize
aircraft belonging to foreign-owned airlines. I believe these fears
are misplaced. Foreign-owned
airlines could be required by the country in which they were based
to put their equipment at the disposal of the government in time of
war. I do not see any problem with that.
We must also intensify our dialogue in other areas, such as security
and the environment. These problems will not be solved by one side
alone we must tackle them together. The problem of emissions
reductions, for instance, is probably not going to be solved by fuel
taxes or other instruments of that kind, but through joint research
that we conduct together. Both Boeing and Airbus can help.
There are two kinds of airlines
today in both the United States and the European Union the
bold ones that
see the future and think that we should liberalize really fast, and
the others that are scared of the future and cling to the existing
rules. Politicians are watching both types of companies and wondering
which to bet on. They should show courage and go for liberalization,
even though it faces problems on both sides of the Atlantic.
The Transatlantic aviation market
is already highly competitive. But
economic barriers to free competition still remain barriers
to free market
access, barriers to free investment and barriers arising from different
rules on either side of the Atlantic.
We in Europe want to remove these barriers. We have a free market in
Europe and we want to extend it to create an open Transatlantic area.
This is the best way to ensure a prosperous
and competitive industry. We believe
a comprehensive EU-U.S. agreement would reinforce our partnership and
show other nations the best way
forward for the future of international aviation.
Jacques Barrot is Vice-President and Commissioner for Transport at
the European Commission. He previously served as French Minister for
Labor and Social Affairs, Minister for Health and
Social Security, Minister for Trade and Craft Industries, and State
Secretary for Housing. Among the Parliamentary offices he has held
are Finance Committee Special Rapporteur, Chairman of the Finance Committee,
and Chairman of the National Assembly Committee on Cultural, Family
and Social Affairs. In June 2002 he became Chairman of the UMP (Union
pour un Mouvement Populaire) Group in the French National Assembly.
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