HL Deb 12 January 1988 vol 491 cc1223-4WA
Baroness Burton of Coventry

asked Her Majesty's Government:

Whether in elaboration of their reply on 10th December (col. 305) they will provide:

  1. (a) a detailed summary of the agreement reached by the European Community Transport Ministers Council on 7th December; and
  2. (b) a summary of the effects of the package in the Community.

Lord Brabazon of Tara

The EC air transport "package" is a set of four legal Instruments designed to provide greater competition in scheduled air services within the Community. Its principal provisions are:

  1. (a) automatic approval for wide ranges of discount fares;
  2. (b) a speedy and binding arbitration procedure on fares;
  3. (c) relaxation of 50:50 capacity sharing restrictions between member states so that capacity share can now move in the range 55:45 and from 1st October 1989 this will increase to 60:40;
  4. (d) "multiple designation"—the right for any country to allow as many airlines as it wishes to fly on any major route, (those with more than 250,000 passengers a year, in year one; 200,000 in year two; and 180,000 in year three);
  5. (e) automatic availability of traffic rights between "hub" and regional airports, subject to certain transitional exemptions;
  6. (f) the right for airlines to operate multi-stop services and compete for traffic on all sectors, except between "hub" airports;
  7. (g) full application of the EC competition rules to aviation for the first time;
  8. (h) agreement that the package constitutes only a "first step" and that further liberalising decisions will be taken by the Council by 30th June 1990.

This amounts to a valuable minimum level of liberalisation in those parts of the Community where we have not been able to achieve more bilaterally. In particular, the effects of the package are:

  1. (a) to enable airlines to offer new kinds of fare and cheaper fares. (In particular, cheap off-peak fares will be available without the requirement of a minimum stay of six nights or of Saturday night);
  2. (b) to make it easier for airlines to introduce competitive economy and business fares against the wishes of other carriers on the route;
  3. (c) to permit airlines to mount greater capacity on the basis of their own commercial judgement;
  4. (d) to open all major routes to direct competition between airlines;
  5. (e) to make traffic rights available on as many as 60 new routes out of the UK;
  6. (f) to facilitate more economic operation by combining two or more routes into a single multi-stop service;
  7. (g) to establish a mechanism for scrutinising potentially anti-competitive inter-airline agreements, granting exemptions where this is justified and providing for proper involvement of member states as in other sectors;
  8. (h) to lay the groundwork for even greater liberalisation in three years.