The European Commission Proposes to Modernize the Single Market for Aviation

On July 18, Jacques Barrot, the European Commission's (“Commission” or “EC”) Vice-President in charge of transport, announced the Commission's intention to improve legislation in relation to the single market for aviation. While the Commission believes that the liberalization of the airline industry brought considerable benefits to consumers, such as reduced air fares, increased routes and greater access to remote regions, it notes that there is room to improve price transparency and the consistent application of legislation.
The Commission is proposing a regulation, complementing the Unfair Commercial Practices Directive, which would require that published fares include all applicable taxes, charges and fees. At present, the Commission noted that airlines, regardless of whether they are budget or national carriers, adopt an inconsistent approach to advertising prices and that consumers are being confused. Airlines would also be prevented from imposing varying prices based on the Member State where the consumer is resident.

Additionally, the Commission intends to further promote equal conditions for airlines across the Single Market by ensuring that EU legislation is interpreted and enforced consistently across all Member States. The proposal is to consolidate three existing regulations into one Single regulation on operating licenses, the rights to provide air services within the EU, and pricing in air transport – the so-called “third aviation package” adopted in 1992. Obsolete measures have been removed and the text clarified. Traffic rights between Member States' cities will be negotiated at a European level and the criteria for issuing, retaining and revoking operating licences will be monitored with the same level of severity across all Member States.

Brussels' push to make ticket prices more transparent is the most recent example of the EC's efforts to bolster regulation of the airline industry. Earlier this summer, it introduced a plan that would introduce a tax on aviation fuel and force airlines to enter its Emissions Trading Scheme to make the industry more environmentally friendly.

For more information contact:

Nicholas Wetzler
202-589-1835
nwetzler@dbmlawgroup.com