EC: EUROPEAN AIRLINES "STILL FRAGILE"

   European airlines have significantly improved their economic and
financial performance following market liberalization in Europe, but they
are "still commercially fragile" when compared to their North American
competitors, the European Commission said.
   In a report published on Friday (May 21), the EC expressed broad
satisfaction about the restructuring of the European airline industry and
the European single market liberalization. However, the EC said that
further restructuring is made difficult by the bilateral agreements between
individual EU governments and third countries.
   "In this framework, air transport in the EU cannot pursue the strategies
most other industries use to be competitive in a global market," the EC
said.
   The EC said that some EU airlines have received one-off subsidies to
support restructuring, but further state aids are no longer justified.