INDUSTRY AFFAIRS UPDATE
CRS Update
The proposal on a Code of Conduct for computerized reservation systems (CRS) of 15 November 2007 (COM(2007)709) seeks to simplify the current Code and to increase competition in the CRS market.
Timothy Kirkhope (Conservatives), MEP (Member of the European Parliament), has been appointed on 9 January 2008 as rapporteur on CRS in the Transport Committee (TRAN), which is the responsible Committee on this issue.
Shadow rapporteur in the TRAN Committee is Robert Evans (Socialists). Opinions will come from the IMCO Committee (Internal Market and Consumer Protection) where the rapporteur is Wolfgang Bulfon as well as from the LIBE Committee (Civil Liberties, Justice and Home affairs) where the rapporteur is Philip Bradbourn.
The TRAN Committee debated the draft report of Timothy Kirkhope on the partial deregulation of CRS on 8 April 2008. Deadline for amendments is 22 April and the Committee will vote on the report at its second May meeting which will be held from 27 to 29 May. The report will be voted in Plenary in July or September 2008.
In the debate the rapporteur explained the issue of the revision of the Code of Conduct of computerised Reservations Systems in detail. In line with the Commission's proposal for partial deregulation, allowing airlines and CRS providers to negotiate free booking and content fees for the services provided to the travel agencies and to the final consumer, the rapporteur tabled provisions which reinforce the competition rules.
The debate centred on the controversial issue of the 'parent carrier' definition. This is sensitive because of the close links between some airlines and CRS providers. Mr Kirkhope proposed a stricter definition, with air carriers that own shares in CRS providers being subject to non-discrimination rules with regard to other carriers and requirements on transparency, governance and auditing. While some Members considered this position balanced, others wished to go further with a total unbundling of the ownership of the airlines and CRS providers, and did not see a reason for amending the existing definition. Several Members made reference to the interests of consumers and to the reduction of the costs of air tickets. The flagging of greener flights in the principal display of CRS screens in addition to information related to the railway connections was proposed by some Members. Some Members also asked for the so called Black List to be implemented in the display screens of the different CRS. On the Marketing Information Data Tapes (MIDT), the rapporteur suggested to leave open the possibility to allow travel agents to negotiate with CRSs of their identification. Members referred to the IATA data base data protection regime and to the Passenger Name Record (PNR).
The Commission stated that it was in favour of finding the appropriate definition of a parent carrier through provisions of competition law and did not consider an examination of the issue of PNR data to be necessary as part of this proposal.
The Transport Council which was held in Luxemburg on 7 April 2008 reached a general approach on CRS.
The Council stated that following significant market developments such as the introduction of alternative booking channels (the airlines' internet websites or their call centres, etc.), the code of conduct needs to be updated to the current market conditions in order to avoid impeding competition and to contribute to fair distribution costs. According to the Commission, about 40% of all airline tickets in the EU are booked via alternative channels and about 60% via travel agents and computerised reservation systems.
The draft regulation is aimed at simplifying the code of conduct and reinforcing competition between the providers of computerized reservation systems. At the same time, basic safeguards against potential competitive abuses should be maintained in order to ensure the provision of neutral information to consumers. In addition, the proposal ensures that rail services, which are integrated into air transport computerised reservation systems, are given non-discriminatory treatment in the computerised reservation systems.
The text agreed by the Council does not modify the substance of the Commission's proposal. The modifications made by the Council should improve and clarify the Commission proposal, particularly as regards provisions on rules applicable to principal displays.
The proposal will replace Regulation 2299/89 as amended by Regulations 3089/93 and 323/99.
Single European Sky (SES) Update
On 9 November 2007 the Commission's regulation 1315/2007 on safety oversight in air traffic management and amending regulation 2096/2005 was published in the Official Journal of the European Union.
The subject matter and scope of the regulation is the establishment of a safety oversight function concerning air navigation services, air traffic flow management and air space management for general air traffic by identifying and adopting the relevant mandatory provisions of the Eurocontrol Safety Regulatory Requirement on safety oversight in air traffic management (ESARR 1) issued on 5 November 2004.
On 21 December 2007, the Commission transmitted to the Council the first report on the
progress of implementation, which lays down the Commission's views on the need for future
development of the Single Sky. It also takes up many of the recommendations made by a
High Level Group (HLG) which was convened by Vice-President Barrot to look at the future
European Aviation Regulatory Framework and which reported in July 2007.
On 7 April 2008 the Council adopted its conclusions on SES. The Council acknowledged inter alia that further measures to improve the performance of SES need to be taken and stressed that Member States should continue to engage actively in the implementation of the Single European Sky, reiterating the importance of the establishment of Functional airspace blocks (FABs) and reinforced civil-military cooperation at the appropriate level, in particular to optimise the use of airspace based on air traffic flows, taking full account of both civil and military needs.
The proposal for a regulation amending the regulations on SES is expected for summer 2008.
Airport Charges Update
In January 2008 the European Parliament adopted a legislative report that sets out common principles for levying airport charges at Community airports. The Directive aims to prevent any abuse of a dominant position in the market by individual airports, thus contributing to the balanced development of the EU airport sector.
The Commission had proposed that the new rules should apply to airports with an annual traffic of more than one million passengers, but the European Parliament is in favour of five million passengers as a threshold or which accounted annually for more than 15% of the passenger movements in the Member State where it is located. This reflects a concern that the Directive as drafted would capture smaller airports who are not in a potentially market dominant position. The European Parliament's decision means that 67 airports throughout the EU will be affected by the Directive.
Under the new rules, all airports will be bound by common rules on provision of mutual information, transparency and the way airport charges may be collected. It is also planned to introduce national independent regulatory authorities to ensure that the Directive is applied in full. This body should establish procedures for resolving disagreements between the airport managing body and the airlines about changes to the level and structure of airport charges including relating to quality of service.
Parliament introduced a new amendment saying: "The airport managing body may pre-finance new infrastructure projects by increasing airport charges accordingly, on condition that a) airport users are provided with transparent information on the extent and duration of airport charge increases; b) all additional revenue is used solely for the construction of the planned infrastructure; c) all official authorisations have been obtained."
Compromise amendments were adopted on the definition of airports charges, on airport networks, on the level of service quality to be provided by the airports managing body in return for the airports charge and the financing of new infrastructure projects.
On 7 April 2008 the Council reached in a public deliberation a political agreement on airport charges.
The Council intends to adopt its common position at a forthcoming meeting after
finalisation of the text, and will forward it to the European Parliament for a second reading in the framework of the co-decision procedure.
In order to facilitate a second reading agreement with the European Parliament, the text of the political agreement includes those amendments which were acceptable to all delegations.
The Council had already agreed in its general approach on a number of changes to the text of the Commission proposal designed to enhance its clarity but also to accommodate concerns expressed by member states. The main modification concerns the scope of the directive. The Commission initially proposed including all airports with an annual traffic of more than 1 million passengers.
The Council increased this threshold to 5 million and the directive will also apply to the largest airport in each member state.
Common rules for safeguarding civil aviation - sky marshals must be "specially selected and trained"
In March 2008 the European Parliament adopted a new regulation that aims to ensure a high level of aviation security throughout the EU. It lays down common rules and standards, such as screening of passengers and cabin baggage, access control and aircraft security checks. The regulation also deals with in-flight-security measures, such as the deployment of "sky marshals" and the carriage of weapons on board an aircraft. The conciliation was approved with 583 votes in favour, 21 against and 35 abstentions.
European Parliament and Council representatives were able to strike a deal in conciliation on civil aviation security beginning of January after long and extensive negotiations.
Speaking in the debate on Monday 10 March 2008, Paolo Costa, Chairman on the Transport Committee and rapporteur on the new regulation, welcomed the agreement and said that the new regulation allows to react more flexibly. As security is a clear priority, controls must be strict and efficient, but must not lead to excessive inconveniences for the passengers. Also, controls must not lead to useless costs as regards the application. New control measures must not be introduced without democratic control and verification. He also stressed, that the principles of the financing and transparency will be addressed in an upcoming report by the European Commission, which will "safeguard undistorted competition between airports and air carriers".
Common basic security standards include, inter alia, screening of passengers and cabin baggage, access control, screening of hold baggage, aircraft security checks, security controls for cargo and mail, staff recruitment and training as well as patrols and other physical controls. Security programs at national airport and air carrier level shall assure that the common rules are applied and maintained. Member States are free to apply more stringent measures. However, those measures must be "relevant, objective, non-discriminatory and proportional" to the risk that is being addressed.
For the first time, in-flight security measures such as access to the cockpit, unruly passengers and in-flight security officers ('sky marshals') are addressed at European level. The new regulation doesn't oblige Member States to deploy in-flight security officers. Each Member State retains the competence to do or not to do so. Parliament and Council agreed that those Member States that decide to deploy sky marshals must ensure that they are "specially selected and trained". Strict rules concerning sky marshals were a crucial point for Parliament at the first and second readings. As regards the carriage of weapons, those must not be carried on board an aircraft (with the exception of those carried in the hold), unless the required security conditions in accordance with national laws have been fulfilled and authorisation has been given by the States involved.
Each Member State shall determine the shares of the cost of security measures to be borne respectively by the state, the airport entities, air carriers, other responsible agencies or users. Additionally, the Commission will, no later than 31 December 2008, present a report which will consider what steps need to be taken in order to ensure that security charges are used exclusively to meet security costs, and to "improve the transparency of such charges". If appropriate, this report will be accompanied by a legislative proposal.
According to Mr Costa, modern-day transport security activities are an answer both to a private (passenger) fear and to a public concern. It would be virtually impossible not to burden the passenger. But, at the same time, it would have been unfair to keep governments away from any financial responsibility in the matter and to burden all citizens without any distinction between users and not users.
Passengers and/or their baggage arriving on flights from third countries that have aviation security standards equivalent to the EU law need not be re-screened. Therefore, agreements between the EU and third countries, which recognise that the security standards applied in the third country are equivalent to the EU standards, should be encouraged.
The regulation will enter into force on the twentieth day after publication in the Official Journal and will be applied not later than 24 months after this date.
Mobile communication services on aircraft
On 7 April 2008 the European Commission introduced rules in order to harmonise conditions for the take-off on pan-European mobile communication services on aircraft.
Two measures have therefore been adopted by the Commission:
- A Commission Recommendation for a harmonised approach on licensing which will promote mutual recognition between national authorisations for mobile communications services on aircraft.
- A Commission Decision which sets out harmonised technical parameters of onboard equipment for in-flight mobile phone use throughout the EU that will allow Member States to recognise each other's licences for mobile communications on board aircraft without risk to mobile networks on the ground.
In addition to these measures, air safety issues are addressed by airworthiness certification procedures for equipment for in-flight mobile phone use, provided by the European Aviation Safety Agency for the whole EU and by civil aviation authorities, to ensure the safe use of technology in the aircraft cabin. Security considerations related to the use of in-flight use of mobile phones are also being tackled by competent national justice and home affairs authorities.
Commercial considerations, such as pricing of in-flight mobile-phone use, are not yet addressed in the measures taken by the European Commission, in view of the fact that these are still nascent services.
These services shall allow business people and consumers to receive and make calls and messages safely with their own mobile phones while flying all over Europe.
The measures announced by the Commission shall harmonise the technical and licensing requirements for the use of mobile phones on board aircrafts. Passengers' phones will be linked to an onboard cellular network connected to the ground via satellite. The system will at the same time prevent phones from connecting directly to mobile networks on the ground below. This will ensure that transmission powers are kept low enough for mobile phones to be used without affecting the safety of aircraft equipment or the normal operation of terrestrial mobile networks.
Harmonising the technical requirements for the safe deployment of in-flight mobile communication services will enable the national licences granted to individual airlines by the Member State in which they are registered to be recognised throughout the EU. For example, an aircraft registered in France or Spain will be able to offer mobile communication services on aircrafts to passengers when flying over Germany or Hungary without any additional licensing procedures.
In proposing rules for one of the first pan-European telecoms services, the European Commission said that it was responding to demand from air passengers to use their mobile phones during flights, as well as from industry, which would like to respond to this demand. Following testing of in-flight mobile communication services in some countries (notably in France and Australia), a number of telecom operators and airlines are planning to launch this service in the course of 2008, bringing connectivity to one of the few situations in daily life where communication has until now been very limited.
OFCOM, the UK telecoms regulator, announced on 26 March that it will allow airlines to offer mobile communications on board aircraft in line with the common European approach.
The EU Roaming Regulation, which will be reviewed before the end of the year, deals with roaming on terrestrial networks only. The cost of mobile communications on board aircraft therefore will fall, first of all, under the remit of the service provider. The European Commission said that it will closely monitor the levels and transparency of prices charged to consumers.
