Air Transport World

Not quite cabotage: EC's third package liberalization opens routes to all airlines but with restrictions on capacity for 4 years. (European Community)

The third and "final" package of measures designed to liberalize civil aviation among the 12 countries of the European Community (EC) from the start of next year, signed in Luxembourg this summer, went some way down the route toward open skies but still lefl a lot of loose ends to be tied (ATW, 8/92).

Airlines are continuing to digest what impact the fine print of the Third Package will have on them and generally are split in their reactions between those that are privately or semiprivately owned-pro-and those the government-owned-anti or at best, lukewarm.

What the Third Package does:

* Air carrier licensing. While licences will continue to be delivered by EC member states, this will be done in accordance with communitywide, nondiscriminatory and in general, more liberal criteria, coordinated through the Joint Aviation Authorities. Citizens of one EC country will be able to establish airlines in other EC countries, as long as they meet financial and safety standards.

* Market access. Licensed as an EC carrier, an airline will be able to fly any route within the EC, including all intra-EC third, fourth, fifth, sixth and seventh-freedom int'l routes. But until April 1, 1997, only "consecutive cabotage" will be allowed. For example, if British Airways wants to fly the French domestic Paris-Nice route, it must add that route on to an existing U.K.-Paris route. And capacity on such domestic services is limited to 50% of seasonal capacity on the int'l leg of the flight.

Both of these restrictions will go after four years, when "standalone" cabotage comes in. The Netherlands, Ireland and Britain wanted standalone cabotage at once; France, Spain, Germany and Italy succeeded in convincing the EC that it should be delayed, although their original plea that the transitional period should be up to six years was watered down. …

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