1. Air Transport Liberalisation: Building the European market and its global effects

2. One of the EU’s success stories
The EU air transport market is a visible success - EU citizens are experiencing the benefits directly:
More routes flown
More competition
More people travelling
Lower fares - in economy class

3. But no “big bang” Liberalisation in Europe was measured and careful
More than simple removal of market access barriers
A strong commitment to safety
Careful transition over some years
Period of restructuring for air carriers
Protection of essential, but thin public service routes
A level playing field and competition rules

4. Process still continuing
Liberalisation complete in 1997
But integration process continues with new rules and the regional market itself continues to grow
15 EU Member States
3 more members via European Economic Area
EU-Swiss agreement
10 new Member States on the way
More states likely to become associated.
30 plus countries within a few years.

5. But still some effects missing…
Little change in structure of industry
Flag carriers still divided along national lines
No real development of multinational airlines in EU
Successful companies limited in their opportunities for expansion
Capital does not flow completely freely
Scope for international competition limited

6. Ownership and Control rules
The EU’s internal market is limited by the ownership and control rules used in international aviation
Like all participants in international aviation, our partners have the ultimate say over internal investment policy
Contrast with other sectors of the economy

7. Time to complete the process
EU citizens have a right to establish companies throughout the Community
EU citizens and their companies have a right to non discrimination
The EU now wants to give its air transport industry its freedoms and rights

8. The EU must now seek change
Issue is legal not just a political aspiration
It must work with partners on new approaches
The EU must seek more flexible designation clauses that recognise the existence of Community air carriers
It must seek market access for more European carriers in bilateral agreements with other states
If EU airlines want to use their rights under the Treaty, we will have to seek to secure those rights

9. Many would benefit from change The benefits would not just accrue to the EU
Air carriers in other countries have greater difficulties to access capital than EU carriers
There are lots of unused traffic rights and under-served markets world-wide
Limitations on ownership and control keep small carriers small - a more flexible approach would let many countries build stronger air transport industries with outside help.

10. What about the dangers? The key issue is preserving safety standards
The EU has been careful to develop safety in parallel with liberalisation, so that we can be sure that standards are respected by everyone.
It must be clear who oversees safety and standards must not be relaxed.
But safety also should not become an excuse to preserve the status quo.

11. EU hopes for ATConf/5
Recognise the need to start unblocking investment in the industry and give airlines new opportunities
Endorse flexibility towards the application of existing agreements
Endorse flexibility towards revising agreements
The “Community of interest” developed by ICAO should be recognised and applied
This is all ICAO and Chicago compatible