THE THIRD PHASE OF LIBERALISATION IN COMMUNITY AVIATION AND THE NEED FOR SUPPLEMENTARY MEASURES.

Abstract

The pace of liberalisation in the European Community is quickening. A certain degree of liberalisation was introduced with the first and second aviation packages which were adopted in 1987 and 1990 respectively, and which led to a commitment to full liberalisa tion by 1 January 1993. On 22 and 23 June 1991 the Council adopted the three regulations which constitute the third phase in the liberalisation of Community aviation and complete the market organisation of this sector. The third aviation package consists of: (1) a Council regulation on the licensing of air carriers; (2) a Council regulation on access for air carriers to intra-Community air routes; (3) a Council regulation on air fares and rates for air services. The intention of the package is to open up the twelve national markets by allowing EC airlines to compete freely in an open, integrated market (liberalisation of the fifth freedom1 and cabotage2 and freeing procedures for setting up prices by double disapproval3). The regulation on licensing defines the criteria established by the national authorities for granting licences to air carriers. It includes sector-specific rules on licensing of air carriers which aim to establish legal and economic standards and to ensure the absence of discrimination by nationality. It deals more specifically with effective control and majority shareholding and solvency requirements of Community air carriers, the need for periodic financial monitoring, and with requirements for an air operator's certificate (safety fitness).