Thursday, November 20, 2008
The Chicago Tribune ran a story last week on the airline sector challenges President-elect Barack Obama will face when he takes office in January. Not surprisingly, the primary tension lies between Obama's dedication to the policy positions of the Air Line Pilots Association (ALPA) and the looming 2010 deadline imbedded in the 2007 U.S./EC Air Transport Agreement which allows EU Member States to suspend concessions granted under the Agreement if the ongoing "second stage" talks fail to yield results. The two "big ticket" items the EU is looking for--significant relaxation of foreign investment restrictions in U.S. carriers and cabotage rights--are the two the ALPA have lobbied the hardest against. As Prof. Brian Havel of the International Aviation Law Institute pointed out, Obama's present course of supporting ALPA's positions may trigger a trade war with the EU. Havel further remarked that "[o]ne would hope the shaper edges of that rhetoric might be softened."
On November 1, 2008, Council Regulation 1008/2008 on Common Rules for the Operation of Air Services in the [European] Community entered into force. The regulation, which has been touted by the European Commission as simply a revision to 1993's "third package" of air transport liberalization, includes new, more stringent, requirements for carrier licensing, new rules mandating price transparency and non-discrimination, along with clarifications on procedures Member States must follow for Public Service Obligations and distributing traffic between airports. Though the regulation sweeps away the last vestiges of restrictive bilateralism between Member States, it fails to include the Commission's proposed rule that it be given standing competence concerning third country aereopolitical relations.
A detailed analysis of the new regulation, along with critical commentary on the gulf between the Commission's proposal and the final rules approved by the Council, may be found in Gabriel S. Sanchez's forthcoming article, "The Total Package? On the New Common Rules for Air Transport in the European Union," due to be published next month in volume 8 of Issues in Aviation Law and Policy.