The first “package” of measures adopted in December 1987 started to relax the established rules. For intra-EU traffic, it limited the right of governments to object to the introduction of new fares. It gave some flexibility to airlines concerning seat capacity sharing.
The second “package” in 1990 opened up the market further, allowing greater flexibility over the setting of fares and capacity-sharing. It also gave all EU carriers the right to carry an unlimited number of passengers or cargo between their home country and another EU country.
The following stage of the liberalisation of air transport in the EU was the subject of a “third package” of measures, which applied as from January 1993. This package introduced the freedom to provide services within the EU and, in April 1997, the freedom to provide “cabotage”: the right for an airline of one Member State to operate a route within another Member State. This single market has been extended to Norway, Iceland and Switzerland in the following years.
Beyond market opening, the single market rests on stringent common rules in order to both ensure a level playing field and continuously improve standards, notably in safety and security.
The "third package" included three legislative measures.
- The introduction of harmonised requirements for an operating licence for EU airlines (Council Regulation (EEC) No 2407/92).
- The open access for all EU airlines with such an operating licence to all routes within the EU (Regulation (EEC) No 2408/92). At the same time, national governments have the possibility to impose public service obligations on routes which are essential for the regional development.
- The full freedom with regard to fares and rates was also introduced (Regulation (EEC) No 2409/92). Airlines are no longer required to submit their fares to the national authorities for approval. Safeguard measures may be introduced, but thanks to the good functioning of the market this has never been necessary in practice.
During the 15 years of application of the "third package", the aviation market has evolved. It is now time to modernise the legal framework. Therefore, in July 2006, the European Commission made a proposal for modernising and simplifying the legal framework for the internal air transport market. It consolidates the three existing regulations of the "third package" into one and aims to ensure an even more effective aviation market in the future. This is a first stage towards the further consolidation of legislation. Studies are on-going in view of elaborating a fully fledged European Civil Aviation Code.
In open markets, it is important to ensure fair competition. Therefore, the European Commission applies the competition rules on mergers and alliances, price-fixing and other arrangements to the air transport sector. Furthermore, a strict enforcement of state aid rules does ensure that airlines operate in a level playing field.