EU to act against subsidized airlines from third countries

EU to act against subsidized airlines from third countries    The European Union’s council of transport ministers on Thursday (Oct. 9) agreed to adopt a European Commission proposal for a regulation that will target subsidization and unfair pricing practices of airlines from third countries.
   The proposal, which is subject to a review by the European Parliament, would give the EU the powers to start proceedings against non-EU subsidized airlines, including the imposition of fines and the restriction of landing rights.
   The procedures will also include the possibility of an out-of-court settlement with the country of the airline under investigation. The new law would apply in cases where it can be shown that subsidies and unfair practices exist, and that they have caused injury to European airlines. EU airlines will be able to lodge a complaint to the European Commission about their non-EU competitors.
   The European council, which represents national governments, said that the proposed regulation would protect the European airline industry from unfair pricing practices.
   “In the commission’s view, financial aid or ‘hidden subsidies’ by third country governments to their operators could have contributed to a situation whereby (European) Community carriers risk no longer being able to compete internationally on a level playing field,” the European council reported in a statement.
   “The current crisis of the sector may have led the state authorities of certain third countries to subsidize their airlines,” the European Commission said in a statement after the council of transport ministers meeting.
   The European Commission said that the regulation will “fill the legal vacuum to react against unfair competition from subsidized third country competitors in the airline sector.”
   “In the European Union, our airlines have to ‘play it by the book,'” said Loyola de Palacio, European Commission vice-president in charge of transport and energy. “This is a very important agreement for our airlines which will be put on an equal footing with their competitors in the future.”
   The European Commission predicted that the regulation might enter into force by 2004.
   The European regulation on unfair practices in the airline sector will be like a regulation on unfair practices in the maritime sector adopted in 1986.