European Air Transport Regulation: Achievements and Future Challenges

This article describes developments in European air transport regulation that has emerged through the confluence of case-law and legislation, marked by four broad areas: liberalization, safety and security, greening, and the external policy. Following the creation of a single market for air transport introduced in three packages, policy shifted to liberalizing and regulating associated services and business conduct. The early emphasis on liberalization of the internal market has shifted to other policy initiatives due to extraordinary events and societal changes. Although air safety performance in the EU is unsurpassed in the world, the Commission wanted to push the boundary even further, by establishing the European Safety Agency to oversee the European Aviation Safety Management System. Another area of emphasis was security, a major focus after the woeful events in 2001, but increasingly under scrutiny on costs and effectiveness. The next important development was greening of the industry exemplified by the inclusion of air transport in the Environmental Trading Scheme of the EU. The bid to include external flights in the trading scheme pushed EU into a controversial leadership position. Although implementation was halted to give ICAO time to seek a global solution, under its mandate from the Kyoto Protocol, a failure may bring about a fragmented regional approach spearheaded by the EU. The article finally discusses the external aviation policy of the EU that came about when the nationality clauses in air services agreements were ruled in breach of the Treaty, freeing airlines to operate extra-EU routes from any EU Member State and enabling the EC to extend EU liberalization policy to external regions, through the Common Aviation Area and the Open Aviation Area. The article concludes that in the coming decade, the EU will strive to strengthen its position as a global countervailing power, symbolized in air transport by a leadership position on environment policy and market liberalization, as exemplified in the EU’s external aviation policy.