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European Union

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Corporate Address
Rue de la Loi / Wetstraat 200
1049 Brussels
Belgium
Website
http://europa.eu
Members
Austria, Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Greece, Spain, France, Croatia, Ireland, Italy, Cyprus, Latvia, Lithuania, Hungary, Malta, Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden, United Kingdom.

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, establishment of the European Constitution
  • 2007: Two more countries Join EU, member states sign Treaty of Lisbon.
  • 2014: EU elects Jean-Claude Juncker as President for five-year term.
  • 2015: Lithuania adopts the Euro as its currency, becoming 19th member of the euro area.

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


 

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Brexit up in the air: implications for aviation if the UK votes to leave the European Union

22-Jan-2016 10:10 AM

Opinion polls are notoriously volatile and unreliable predictors. Nevertheless, a recent opinion poll* in the UK has indicated that voters favouring a British exit from the European Union now number more than those favouring the status quo. Whether or not the poll is totally accurate, it indicates that a so-called "Brexit" is a serious possibility.

UK Prime Minister David Cameron's Conservative government has promised UK citizens a referendum on this before the end of 2017. Meanwhile, he is attempting to renegotiate the UK's membership, so that he can then back a campaign to stay in the EU. He is now hopeful of securing a deal with the UK's European partners at EU summits in Feb-2016 or Mar-2016. This could pave the way for a referendum as soon as Jun-2016.

This report considers the possible implications of a Brexit on the aviation industry in the UK and Europe, with a particular focus on airline traffic rights. Much will depend on how, and to what extent, a post-EU Britain chooses to replicate its existing access to the EU single market in aviation (and in other sectors). Suffice it to say - the situation is uncertain.

Norwegian Air Shuttle furthers its struggle to make legitimate use of EU-US open skies rights

13-Jan-2016 7:33 PM

Norwegian Air has attempted again to gain DoT approval. Norwegian Air Shuttle's long haul operations, which were launched in 2013 and struggled through 2014, are now flourishing. Routes to the US from London Gatwick, outside the airline's home market, have been added to its Scandinavian-based long haul operation.

However, the long haul network is lopsided, with Bangkok the only destination that is not across the Atlantic. The background is complicated, but this is in large measure due to the imbalance in traffic rights available to it as a Norwegian operator in an EU country. It has waited for more than two years to receive a US foreign carrier permit for its Irish subsidiary, Norwegian Air International, but has been met with intransigence from the US Department of Transportation.

Ever innovative, Norwegian is now having another go, making an application for a US permit with another new subsidiary, Norwegian Air UK, in Dec-2015. Predictably, labour organisations and Norwegian's main Scandinavian competitor SAS have already raised objections to this latest (inevitably legitimate) attempt to operate within the EU-US open skies agreement. The Department of Transportation must not allow itself again to be hijacked by anti-competitive factions.

New EU Aviation Strategy avoids key issues as Asia Pacific and Middle East claim the future

9-Dec-2015 6:53 PM

Europe is still an important aviation region. But it is diminishing in importance and its position as one of the two leading world regions (with North America) has been surpassed by Asia Pacific. Moreover, it is clear from orders for widebody aircraft, the main agent of competition between the regions, that the future belongs to Asia Pacific and the Middle East. In this respect, Europe and North America are becoming 'also rans'.

That said, Europe is home to globally significant airlines and other aviation companies, and these players are anxious to participate in the growth offered by aviation markets to the east. The European Union's new Aviation Strategy document, published on 7-Dec-2015, recognises this: "The EU aviation sector must be allowed to tap into the new growth markets where significant economic opportunities will be generated in the decades to come".

However, all six associations representing Europe's aircraft operators issued a joint response calling for more specific and far-reaching remedies. In a rare display of unity, AEA, EBAA, EEA, ELFAA, ERA and IACA* said that that the strategy "lacks ambition". It certainly seems to duck some key issues.

* AEA (Association of European Airlines), EBAA (European Business Aviation Association), EEA (European Express Association) ELFAA (European Low Fares Airline Association), ERA (European Regions Airline Assocation), IACA (International Air Carrier Association)

Lufthansa, Singapore Airlines respond to Gulf competition with a limited JV. There is scope for more

13-Nov-2015 12:54 PM

The rise of the Gulf carriers continues to pressure airlines that were once formidable individual competitors into joining forces to combat a more effective rival. And so the Lufthansa and Singapore Airlines groups have been forced to compromise their previous independence. One new strategy is to form a revenue sharing joint venture. This method of cooperation is becoming more common between Europe and Asia, having already been established in the trans-Atlantic and trans-Pacific markets. Most JVs were established to enhance a position of strength built on pre-existing solid footing. In comparison, Lufthansa and SIA are setting aside differences in this time of duress to respond to the Gulf carriers that have changed their business profoundly.

Although Lufthansa and SIA account for about 27% of non-stop Western Europe-Southeast Asia capacity, their share of flown passengers is around 13%. Emirates alone has 12%; adding Etihad and Qatar now has 27% of the market transitting via the Gulf. But SIA and Lufthansa are the only airlines operating non-stop service between their respective countries.

Despite the severe situation, perhaps bordering on crisis, the response from Lufthansa and SIA is limited. Their JV will only cover routes from Singapore to Germany (the hub of Lufthansa) and Switzerland (the hub of Swiss). This is only one third of their Europe-Southeast Asia market. Lufthansa and SIA will remain competitors on many other market pairs - and this could become a source of friction, or at least suspicion. A Singapore-London passenger, for example, could go non-stop on SIA outside the JV or via a German/Swiss hub under a JV. Both airline groups will compete for a Kuala Lumpur-Amsterdam passenger.

European Parliament on aviation: build a single sky, promote liberalisation - and protectionism

16-Sep-2015 11:45 PM

The European Parliament has passed a resolution attempting to set out the assembly's views on how the European Union should develop and integrate its transport policies to form a genuine Single European Transport Area. It does not read easily.

The resolution notes that the transport sector employs around ten million people in the EU and accounts for 5% of GDP and describes it as "a frontrunner in generating further economic growth and job creation, and promoting competitiveness, sustainable development and territorial cohesion". It also trumpets Europe's position as a transport "world leader", in both manufacturing and operations, and stresses the importance of its maintaining its competitive position against "powerful new players and new business models".

Central aims of the resolution are to place people at the heart of transport policy and to honour greenhouse gas commitments across all modes. It supports European connectivity, the Single European Sky and liberalised aviation agreements with the BRICs and ASEAN. However, it may stir controversy with proposed changes to passenger rights regulations and what look like illiberal stances on Gulf/Turkish competition and "flags of convenience".

European airports: The Juncker Plan (EFSI) should encourage investment in Europe's infrastructure

14-Aug-2015 7:00 PM

This CAPA report looks at the European Commission’s Investment Plan for Europe, which is also known as the European Fund for Strategic Investments (EFSI) and the ‘Juncker Plan’ after the EC President Jean-Claude Juncker, who instigated it in Nov-2014.

Its purpose is to unlock public and private investments into the "real economy" (which means the part[s] of the economy that are concerned with the production of goods and services, as opposed to the part that is concerned with buying and selling on financial markets.

Those investments are expected to total at least EUR315 billion (USD348 billion) over the three fiscal years Jan-2015 to Dec-2017.

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