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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.


2,736 total articles


116 total articles


CAPA's Airlines in Transition: limits on ownership, legal knots, labour and long haul

11-Apr-2014 11:20 AM

At CAPA's Airlines in Transition 2014 conference in Dublin, the opening session included high profile industry figures debating a key area of airline industry transformation (or not): national ownership controls. The panel included IAG CEO Willie Walsh, Norwegian Air Shuttle CEO Bjorn Kjos, AirAsia co-founder and Dublin Aerospace Chairman Conor McCarthy, European Commission Director Aviation and International Transport Policy Matthew Baldwin and Irish Aviation Authority CEO Eamonn Brenan.

John Byerly, former Deputy Assistant Secretary for Transportation at the US State Department and a major negotiator in the EU-US Open Skies agreement, set the context for the discussion with a review of the "archaic" restrictions on foreign ownership and control. All panellists, airline executives and regulators alike, agreed that the current system is "stupid".

Israel’s air travel markets benefit from liberalisation, but El Al is losing out to LCCs: Part 1

1-Feb-2014 11:45 AM

Israel’s air travel market seems to be attracting attention. In recent weeks, there have been headlines about new routes from Vueling, TAROM, Arkia, Transavia, Jetairfly, Wizz Air, Yan Air, Med-View Airline, easyJet, Meridiana, Air Serbia and Air Onix; and increased frequencies by TAROM, Norwegian, easyJet, El Al, Alitalia, Lufthansa and airberlin.

Following the signing of an EU-Israel open skies agreement in 2012, a factor in increased services from the EU, countries including Russia, the Philippines and Kenya are also considering developing new air services agreements with Israel. In addition, a security-related restriction on Israeli carriers operating to Turkey (one of the few major aviation markets outside Western Europe and the US that has links to Israel) looks set to be lifted.

For a country of above average levels of wealth, as defined by GDP per capita, air travel penetration is also high, but lower than for other similarly wealthy nations. The Israeli market has generally seen healthy growth in recent years, but this has been uneven. Israel has significant potential for the airline industry, but its realisation will continue to be subject to politically-driven developments on traffic rights.

airBaltic-Etihad codeshare could lead to deeper links. Meanwhile, EU state aid inquiry continues

19-Dec-2013 12:02 PM

AirBaltic commenced a new codeshare with Etihad Airways on 16-Dec-2013, launching a four times weekly A319 service and linking its Riga hub with Etihad’s in Abu Dhabi. Riga is the Baltic region’s principal transfer point – the airport says that 33% of passengers in 2013 are transit/transfer traffic – and Abu Dhabi is rapidly emerging as an important hub for travellers flying between Europe and Asia.

Following airBaltic’s near bankruptcy in 2011 and its subsequent renationalisation and investment from the Latvian Government, the state has been on the look out for a private sector investor. Meanwhile, CEO Martin Gauss has been focusing on the carrier’s restructuring programme and expects to restore profitability in 2014 after achieving better than expected results for 9M2013.

An EU investigation into state aid received in 2011 is ongoing and could potentially lead to the carrier having to repay the funds received from the state. This would increase the pressure to secure fresh investment. Some observers have suggested that the Etihad partnership could be a stepping stone to a future equity relationship. The codeshare attests to some meeting of minds already.

Air Astana plans more rapid growth in 2014 but Kazakhstan airline market shows signs of slowing down

22-Nov-2013 7:14 PM

Air Astana is planning another year of double-digit capacity growth in 2014 as the Kazakhstan flag carrier expands its 767, A320 and E190 fleets. The carrier will focus on further expansion in the CIS and Central Asia region, but new 767-300ERs will also enable some capacity growth across its long-haul network.

ASK growth of 15% is expected for 2014, following 16% growth in 2013. But Air Astana plans to slow down expansion in 2015, ending a period of five consecutive years of expansion at a pace of approximately 15% per annum.

Market conditions have become less favourable in 2013, impacting load factors and profit margins. The prospect of increased competition, including the possible opening of Kazakhstan’s domestic market to Russian carriers, clouds Air Astana’s medium to long term outlook.

Aegean Airlines' acquisition of Olympic: approved by European Commission, but questions remain

17-Oct-2013 8:09 PM

On 9-Oct-2013, the European Commission (EC) approved the acquisition of loss-making Olympic Air by loss-making Aegean Airlines. Although a previously proposed merger of the two was blocked by the Commission in early 2011, its analysis now indicates that Olympic would go broke in the near future if it were not acquired by Aegean.

This would leave Aegean as Greece’s only significant domestic carrier. The EC argues that the competition provided by Olympic on domestic routes would disappear regardless of the acquisition. It concluded that any competitive harm caused by the removal of Olympic as an independent competitor is not caused by the merger, which “is compatible with the internal market and must be authorised.”

This raises some interesting questions. For example, why did the EC not give fuller consideration to the possibility that new entrants might fill the gap left by Olympic? And why is Aegean paying EUR72 million for a loss-maker that the EC says is “highly unlikely to become profitable in the foreseeable future under any business plan”?

Cyprus Airways: an airline in need of the turnaround of all turnarounds

18-Sep-2013 6:38 PM

Mired in financial difficulty, Cyprus Airways is one of many European airlines currently working to implement a Turnaround Plan. It is probably the one with the most urgent need, although the exact state of its finances is shrouded in mystery. It has still not published an Annual Report for 2012 and it recently postponed its 1H2013 financial results pending an investigation of its position by the European Commission in connection with a State Aid application.

Cyprus has been one of the economies worst affected by the eurozone crisis and its national airline has been hit hard both by this and by ever fiercer competition, in particular from LCCs. In addition, the divided status of Cyprus prevents the airline from operating in one of the largest markets, namely Turkey. Following a wholesale replacement of the Board of Directors in May-2013, the new management team may not have another chance to save the airline.

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