TRANSPORT COUNCIL, 22ND AND 23RD JUNE (Hansard, 24 June 1992)

The Minister of State, Department of Transport (The Earl of Caithness)

The Transport Council held in Luxembourg on 22nd and 23rd June took three decisions of major and lasting importance for European transport.

It agreed to liberalise the licensing of aviation operators, their access to markets in the European Community, and the fares they charge from 1st January 1993. The liberalisation and competition this will stimulate will be of fundamental and enduring importance to all those who use and work in aviation in Europe.

Restrictions on fares have been removed and airlines are free to introduce new lower fares without going through complex approval processes. The mechanisms by which other governments can keep fares artificially high have been removed.

32WA

British airlines will be able to fly any international route in the Community without restriction. Airlines will be able to fly not only London-Paris, but also London-Paris-Rome, and, most importantly, Paris-Rome without any link with London. This removal of restrictions applies to the charter travel market as well as to scheduled services.

The Council also agreed to liberalise maritime cabotage. The anachronism of the United Kingdom and some other member states having their coastal trades open while the rest did not will be ended. Here too the opening-up of markets is going to be of great importance and value to all users of shipping and to shipowners.

The Council also agreed on cabotage for road passenger transport. This is of major importance to passengers and operators, most immediately for those using coach tours to other states. The details of the new agreements are as follows.

Aviation Liberalisation

The unanimous agreement of the Council on the third and final stage of aviation liberalisation for the completion of the Single Market was on three regulations covering licensing, market access, and fares and rates. Under the licensing regulation, any airline that meets uniform financial and safety requirements will from 1st January 1993 be entitled to an operating licence in any member state; member states will no longer be able to licence only "flag carriers". Under the market access regulation, Community airlines will operate on an equal basis throughout the EC, with access to all international routes within the Community from 1st January 1993. Community airlines will also be able to fly internal routes within member states (cabotage) from the same date where their flights are linked to an international flight, and from 1st April 1997 where they are free standing. The fares and rates regulation removes government restrictions on pricing. New fares can be brought in immediately, and existing restrictions on scheduled fares and charter rates will be swept away. There will be safeguards to protect the consumer against excessively high or predatory fares, but only exceptional circumstances. Regulation of fares is over.

Road Passenger Liberalisation

The Council's decision on liberalisation of road passenger cabotage provides for liberalisation of closed door tours (i.e. where the same vehicle is used to carry the same group of passengers throughout a journey), from 1st January 1993 and the liberalisation of other non-regular services from 1st January 1996. There will also be a Council decision on regular service cabotage as soon as possible after a Commission proposal, to be submitted by the end of 1995.

Maritime Liberalisation

Under the agreement of liberalisation of maritime cabotage, Community shipowners will from 1st January 1993 have the general right to carry goods between mainland ports in the Community and also from any EC mainland port to off-shore installations. 33WA Liberalisation of some of these mainland port services will be phased in in the Mediterranean and along the coasts of Spain, Portugal and France, e.g. cruises from 1st January 1995, transport of strategic goods from 1st January 1997; services by ships smaller than 650 GT from 1st January 1998 and regular passenger and ferry services from 1st January 1999. Mainland to island and island to island services will be liberalised in the Mediterranean from 1st January 1999, subject to a special exemption for certain Greek trades from 1st January 2004. In general there will not be crew nationality restrictions for mainland cabotage over and above those imposed by the state of registry, but for a transitional period in respect of most types of island cabotage, host member states may impose their own crew nationality requirements.

The Council also discussed but did not reach agreement on: the liberalisation of road haulage cabotage; fiscal harmonisation in the road sector; and a mandate for negotiations with third countries on inland waterways.

Forthcoming UK Presidency

There are important tasks remaining for the UK Presidency in the transport sector. Full liberalisation of road haulage cabotage has yet to be agreed; and there will need to be Community agreement on airport slot allocation to complement the third aviation package. I also hope that during the UK Presidency the Community will take forward the increasingly rigorous application of the state aids rules in the transport sector so as to provide for full and proper competition in the Single Market.