COMMENT:
It has been a busy week for European airlines” legal departments. They have had to try and understand the latest official offerings which ultimately come from Brussels. Leendert Geelhoed, advocate general of the European Court of Justice, started the ball rolling with a preliminary judgement which appears not to augur well for the airlines. Whilst itself having no legal authority, the opinion will guide the Luxembourg-based judges when they deliver their final ruling later this year on the question of who pays (or doesn”t pay) for air delays. IATA and the European Low Fares Airline Association (ELFAA) brought the action. The airlines” essential argument is that the compensation that passengers are now entitled to receive discriminate between airlines and other forms of travel and also (according to ELFAA) between premium fare airlines and budget carriers. Round one to Brussels. The British Airways problems at Heathrow during August showed up some of the problems. As BA pointed out, the difficulties were not of their making and therefore compensation was not down to them. Airlines are not going to admit that they are less than perfect. Would any business? It”s always somebody else”s fault.
Also last week the European Commission finally published its long-awaited guidelines on aid to airlines on start-up from regional airports, those with less than 5m passengers. The EC says the rules guarantee "equal treatment for public and private airports and ensure that airlines receiving aid are not unduly favoured." The new transport commissioner, Jacques Barrot, says that the EC "wishes to encourage the development of regional airports and personal mobility." The rules allow the granting of state aid by airports to airlines, but the amount may not exceed "30-50%" of the additional costs incurred in starting up the new service, including marketing costs and the costs of setting up at the regional airports concerned. The new route benefiting from the aid must "ultimately prove profitable", and for this reason the value of the aid must be reduced over time and limited to a maximum of three or five years, in the case of disadvantaged regions and the outermost regions of the EU. Adoption of the guidelines follows consultation with the industry and the 25 member states and was launched in February, a year after the EC ruling that some of the aid granted by the Walloon region to Ryanair, for setting up a base at Brussels South Charleroi, constituted illegal state aid and had to be paid back. Ryanair has appealed that ruling at the European Court of Justice.
The Tower of Babel that is Brussels continues to confuse. According to The Bible it never worked. The 21st century version does not appear to be doing much better.
http://europa.eu.int/comm/dgs/energy_transport/state_aid/index_en.htm
http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2004/c_251/c_25120041009en00080008.pdf