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External Aviation Policy - Horizontal Agreements

A horizontal agreement is an international agreement negotiated by the Commission on behalf of EU Member States, in order to bring all existing bilateral air services agreements between EU Member States and a given third country in line with EU law.

2002 European Union Court of Justice judgments

In November 2002, the Court of Justice of the European Union (CJEU) found that if an Air Services Agreement (ASA) between an EU Member State and a third country permits only the designation of airlines which are owned and controlled by nationals of that signatory EU Member State, such designation is discriminatory and is in breach of EU law. Consequently, every EU Member State is required to grant equal market access for routes to destinations outside the EU to any EU carrier with an establishment in its territory. The ASAs between EU Member States and third countries must therefore be amended to reflect this legal requirement.

Certain traditions of international air services regulation, dating back from 1944, had become contrary to the principles of the single aviation market established in Europe. Whereas, traditionally, each international airline should have a determined nationality, the EU has over the last decades developed a single internal market where nationals of one EU Member State can invest in, establish and control airlines licensed in any other EU Member State. The notion of "EU air carrier" has been reinforced by the fact that airlines in the EU are established and licensed under the same rules and can operate any route within the EU. High standards are maintained and further improved through common rules on key issues such as licensing, safety and security.

Moreover, some aspects covered in bilateral air services agreements (ASAs) are within exclusive EU competences and in consequence non-negotiable autonomously by EU Member States.

If an agreement does not include the EU designation clause (whereby all EU airlines established in the territory of the EU Member State in question are allowed to apply for available traffic rights), it would contradict the objectives of this common policy. In breach of the principle of the freedom of establishment laid down in Art.49 (TFEU), such an agreement would continue to discriminate between EU companies on the grounds of nationality.

EU approach since 2003

Two methods were developed to solve the issues identified by the CJEU, i.e. amending the existing bilateral air services agreements:

- bilateral negotiations between each EU Member State concerned and its partners, amending each bilateral ASA separately,

- negotiation of single "horizontal" agreements, with the Commission acting on a mandate from EU Member States. Each "horizontal" agreement aims at amending relevant provisions of all existing bilateral ASAs in the context of a single negotiation with a third country.

Current state of play

Method of separate bilateral negotiations: changes with 73 partner States, representing 340 bilateral agreements corrected.

Method of horizontal negotiations: changes with 41 countries and one regional organisation with 8 member states, representing an additional 670 bilateral agreements. The latter has the advantages of simplicity as well as cost and time efficiency.

This work aims to eliminate legal uncertainty and ensure the continuity of bilateral ASAs and the development of international air services. Bringing existing bilateral agreements into line with EU law is important also for the third countries concerned and for the whole aviation sector – including airlines, users etc. Consequently, this objective will need to be accomplished efficiently and within a reasonable time scale.

 

Legislation

Regulation (EC) 847/2004 on the negotiation and implementation of air service agreements between Member States and third countries

 

Policy and other related documents

Communication from the Commission on relations between the Community and third countries in the field of air transport [COM(2003)94]

Commission Decision on approving the standard clauses for inclusion in bilateral air service agreements between Member States and third countries jointly laid down by the Commission and the Member States

Information note: EU external aviation policy: why does the EU want to modify air service agreements between its member States and partner countries?

Model Horizontal Agreement

 

Summaries of legislation

Air service agreements between Member States and third countries

 

Status of amendment of bilateral agreements

Bilateral ASA brought into legal conformity since ECJ judgments on 5 November 2002

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