European Commission launched (16-Feb-2011) infringement procedures against Cyprus, Ireland, Poland, Portugal, Slovakia and Spain over their bilateral air service agreements with Russia, sending each Member State a formal request for information. The Commission is concerned that the agreements may hinder competition between European airlines and provide the basis for Siberian overflight charges that may be illegal under EU antitrust rules. Similar letters of formal notice were already sent in Oct-2010 to Austria, Finland, France, Germany and and in Jan-2011 to Belgium, Denmark, Italy, Luxembourg, The Netherlands, Sweden and the UK. The Commission is now assessing the compliance with EU law of the remaining Member States' bilateral aviation agreements with Russia. The view of the European Commission is that air transport agreements must treat all EU airlines equally and respect antitrust rules. Otherwise some EU airlines may be treated less favourably than their direct competitors or face paying unreasonable additional charges which may be passed on to consumers in higher airfares. Member States have two months to respond to the letters of formal notice. [more]
EC launches infringement procedures against six states over agreements with Russia
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Airport pairs: Western Europe-US shows the value of open skies as routes and new entry proliferate
For Western Europe there is no bigger long haul market than North America. In terms of the number of airport pairs between the countries of Western Europe and long haul destination countries, connectivity to the United States dominates. There are more direct routes between Western Europe and the US than there are between Western Europe and the whole of Asia Pacific.
This report presents high level data on the numbers of airport pairs between each Western European country and the US and how these number have changed. EU-US liberalisation in 2008 has stimulated growth in the number of direct connections, although the global economic downturn impeded this for a while. However, the additional routes have not been spread evenly across Western European countries.
Since 2010, additional route numbers from Western Europe to the US have been greatest from the largest markets – the UK and the US – and from the smaller countries, particularly Ireland, Iceland and Norway. Countries in between, including France, Italy, Spain and the Netherlands, have hardly added any new US routes at all.
AENA: Spain's airport operator must cut charges, but airline yields are already falling
After much delay, in late Jan-2017 the Spanish Council of Ministers approved the airport regulation document setting AENA's airport charges for the next five years. The headline numbers include a 2.2% annual decline in charges from 2017 to 2021, equivalent to an overall cut of 11% through the period.
The legal framework prevents tariff increases before 2025, but the outcome was in contrast with the Spanish airport group's own proposal to freeze charges. Strong traffic growth of 11% to an all time high level of 230 million passengers in 2016 may have influenced the regulator's decision.
In response, AENA has decided to remove an incentive mechanism which rewards airlines for traffic growth with airport charge discounts. The removal of discounts is estimated to offset the 11% reduction by one third.
In fact, this discount scheme has been quite effective in stimulating traffic growth in recent years. However, traffic growth in Spain was also boosted in 2016 by high airline capacity growth switched from other (risk) markets. Airline yield declines are probably noticeably heavier than AENA's regulated price reduction.