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The European Union is a political and economic union comprising 27 states located primarily in Europe. The EU collectively represents the world's largest economy, with a GDP of USD15 trillion (2009), and counts some 500 million people within its borders. The EU operates as a single market, with a common system of laws and trade policies, with 16 states have forming a monetary union, adopting a common currency - the euro. The single market is based on the four freedoms of the EU: the free movement of labour, capital, goods and services. 22 member states have agreed to abolish passport controls between them, under an agreement known as the Schengen Agreement. Major institutions of the EU include the European Commission, the European Council, the European Parliament, the European Court of Justice and the European Central Bank.

The European Union was established in the aftermath of World War Two to bring peace, stability and prosperity to Europe. Key developments in its history include:

  • 1951: The European Coal and Steel Community is established by the six founding members
  • 1957: The Treaty of Rome establishes a common market
  • 1973: The Community expands to nine member states and develops its common policies
  • 1979: The first direct elections to the European Parliament
  • 1981: The first Mediterranean enlargement
  • 1993: Completion of the single market
  • 1993: The Treaty of Maastricht establishes the European Union
  • 1995: The EU expands to 15 members
  • 2002: Euro notes and coins are introduced
  • 2004: Ten more countries join the Union

European Commission Vice-President, Siim Kallas, is responsible for Transport.


 

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ACI Europe promotes open skies; a resounding precedent for airlines and other airports to follow

26-Jun-2015 5:15 PM

Aviation in Europe has a PR problem, which is not helped by the fragmentation of industry representation. Efforts to consolidate representation have so far not yielded material results. Europe's five largest airlines are now attempting to seek common ground, prompted by the European Commission's consultation on a new aviation policy. However, they are avoiding obvious sticking points such as protectionism with regard to competition from Gulf-based airlines. By contrast, airport representation is unified in ACI Europe, which has also responded to the Commission with a liberal set of policy proposals.

Recent changes in the membership of Europe's main airline representative bodies have seen ELFAA become its biggest airline association, measured by its members' passenger numbers, ending the previous hegemony of AEA. IAG's legacy airlines defected from AEA to ELFAA due to differences of opinion over market liberalisation.

There has never been a greater need for a single voice on issues such as taxation and the infrastructure provision (both on the ground and in the air). Aviation needs to argue its case and more effectively promote its benefits to the public.

Norwegian Air Shuttle renews its attempt to obtain US rights for NAI. Part 1: the arguments

17-Jun-2015 8:39 PM

On 1-Jun-2015, Norwegian made another attempt at asking the US Department of Transportation (DOT) to allow its Irish-registered subsidiary, Norwegian Air International (NAI), to operate transatlantic routes under the EU-US open skies agreement. NAI's case, filed in Dec-2013 and completed in Feb-2014, has been pending for longer than any other such application.

To address its opponents' stated concerns that NAI is a "flag of convenience", whose only purpose is "social dumping", Norwegian now says that it will employ pilots and cabin crew only from Europe and the US. If there was a clear reason to deny the application, surely this would have been decided by now. Many informed parties, including the European Commission, the lead negotiators of the EU-US agreement, consumer and trade organisations and competitor airlines do not believe that there is such a reason.

Meanwhile the DOT has allowed itself to be hijacked by the anti-competitive agenda of the Big Three US airlines and a number of labour unions. In this report, we outline the arguments surrounding this case. In a second part, we will look at the impact of Norwegian's transatlantic operations on competitors' traffic share.

UK air transport policy post-Scotland vote; 'devolution' could reshape previous aviation plans

1-Oct-2014 3:00 PM

UK aviation policy may well be substantially changed in the wake of the 18-Sep-2014 vote on the independence of Scotland, even though Scotland remains part of the UK. In this report we speculate on some of the possible aviation outcomes.

Roughly 55% of the electorate voted against independence versus 45% for, although four of 32 areas did vote in favour, including the biggest city, Glasgow. But that decision has hardly settled the matter; indeed the process of electioneering has opened up a Pandora’s Box of issues that possibly threaten the 307 year old Union even more than Scottish independence alone would have done. As ever, aviation will be dragged into the melee.

One thing now apparent is that there are no longer any certainties and that the Airports Commission especially needs to be aware, at a critical moment in its deliberations, of the many new forces at play - and the potential new scenarios.

Ryanair raises FY2015 profit guidance after strong 1Q. Warm and fuzzy O'Leary may be working

29-Jul-2014 12:31 PM

Ryanair increased its profits substantially in 1QFY2015, as revenue per seat grew faster than cost per seat. By comparison with the same quarter a year earlier, revenues and profits were assisted by the inclusion of Easter in 1Q this year, but the underlying trends still looked favourable.

In spite of its caution over the outlook for average fares in 2H, Ryanair has raised its profit guidance for FY2015, based on higher traffic and load factors and lower cost per passenger than previously expected.

This is in contrast with its profit warning last autumn (and with more recent profit warnings from a number of European legacy carriers) and gives some comfort that its strategic shift to increase the emphasis on customer service may be starting to work.

European air transport competitiveness. CAPA contributes to the debate at ECAC/EU Dialogue

11-Jul-2014 12:00 PM

On 3 & 4-Jul-2014, many of Europe's senior national and Commission-level aviation civil servants and regulators joined representatives of airports, ANSPs, airlines and labour organisations at a luxury hotel in Vienna. Billed as a Dialogue between the European Civil Aviation Conference (ECAC) and the European Union (EU), the purpose was to discuss European air transport competitiveness and to seek a way forward in a global environment.

The European aviation industry, its regulators and policy makers acknowledged that the continent is falling behind other major world regions in connectivity and airline profitability and needs to think about how to do better. By the end of the two days, while there were one or two protectionist noises, there was a near consensus view that market forces should be allowed to work. In addition, 'levelling the playing field' with other regions should focus on reducing aviation taxes and easing the processes for infrastructure development.

In this report, we summarise CAPA's analysis of the state of Europe's air transport sector, which was presented at the conference, and the other main themes that emerged from the Dialogue.

Airport charges: EC reports increased transparency in setting charges, but uneven implementation

30-Jun-2014 12:43 PM

The European Commission (EC) has released a report on Member States' application of the European Union (EU) rules on airport charges — the fees airlines pay to airports for the use of runways and terminals — which are sometimes estimated to account for up to 10% of airlines' operating costs. The Directive currently applies to around 75 airports in the European Economic Area, which comprises the 27 member states of the EU together with three of four states that are members of the European Free Trade Association; namely Iceland, Liechtenstein and Norway. (Croatia has applicant status to the EU).

The report shows that since the introduction of the rules in 2011 following a 2009 Directive, larger European airports have become more transparent when taking decisions about these charges. In general, consultations between airports and airlines, as required by the Directive, are now being carried out and Member States' independent supervisory authorities have been set up.

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