The EU Wants to Make it Easier to Deal With Unfair Aviation Competition

The European Union has unveiled plans to make it easier for airlines in member states to take action against what they consider to be unfair competition.

Growth in aviation has been one of the most successful aspects of the EU with liberalization helping to increase competition and drive down prices. This freedom is also granted to any airline flying in from outside the EU flying in – but is not always reciprocated.

The European Commission – the organization’s executive arm – refrained from giving any specific examples but the implied threat is likely aimed at carriers in the Gulf, who have long faced criticism for their supposed unfair tactics.

Earlier this year Lufthansa and Air France-KLM wrote to the EU asking for it to intervene to avoid long-term damage because of “incredibly fast parallel expansion of the Gulf carriers in Europe.”

Under the new rules, should the EU investigate a matter brought to its attention by an airline and find wrongdoing “it could propose compensatory measures to offset the injury.”

“The Commission is proposing a new regulation to ensure that EU airlines can compete on the basis of equal opportunities and connectivity can be safeguarded. It will allow the EU to take appropriate action should certain practices put EU connectivity at risk,” said Commissioner for Transport, Violeta Bulc at a press conference.

European airlines aren’t the only ones worried about competition from the Gulf carriers. Some U.S. airlines are also getting increasingly furious with the practices of Emirates, Etihad and Qatar, and have put pressure on President Trump to act.

Foreign ownership

As part of its Aviation Strategy for Europe initiative, the Commission also wants to create new guidelines to bring “more clarity and certainty to investors” on the subject of airline shareholding.

Currently, non-EU nationals can only own a maximum of 49.9 percent of any airline entity. Gulf carrier Etihad Aiways has minority stakes in Alitalia and Air Berlin, Qatar Airways has built up a 20 percent holding in IAG, and Delta Air lines owns 49 percent of Virgin Atlantic.

Bulc said the ownership rules would not be relaxed “at this point,” hinting that it would be something the Commission might address again in the future.