EU eyes Egypt, neighbours in airline shake-up

Ahram Online and agencies, Thursday 27 Sep 2012

Europe is looking to fast-growing markets in the Middle East and Asia in an attempt to boost competitiveness

Europe is looking to eastern skies for new agreements and opportunities (Photo: Reuters)

The EU is eyeing aviation accords with Egypt and other emerging economies in a bid to enter new markets and boost the competitiveness of its airlines.

Egypt, Tunisia and Turkey are among the neighbouring countries which the European Union says it will approach for air-service agreements to help its airlines expand in the Middle East and beyond, in a move which could produce annual benefits of 12 billion euros ($15.4 billion).
"Archaic ownership and control restrictions" must also go as part of an international effort so as to ensure airlines get easier access to needed new capital, EU Transport Commissioner Siim Kallas said in a statement.
Kallas said European aviation had suffered badly in the economic downturn and it needed a shake-up to make it more competitive given the rise of fast growing airlines in Asia and the Middle East targetting a global market.
At the same time, non-EU carriers are reinforcing their global position. For example, the fastest regional traffic growth in the world is expected to be in the Middle East, where by 2030 the region's airlines will represent 11 per cent of world traffic, up from 7 per cent in 2010.
The European Union would negotiate "new and more effective EU instruments to protect European interests against unfair practices," he said.
Standard "fair competition clauses" would be included in current bilateral air services agreements between EU and non-EU countries, he added.
Most countries apply control restrictions -- foreign ownership in US airlines is limited to 25 per cent and in the EU 49 per cent -- but these deny carriers access to new capital and prevent consolidation, Kallas said, adding: "It is now time to address this issue more vigorously."
"We urgently need a step change. Faced with the dramatic changes in global aviation, Europe must respond and adapt rapidly or be left behind," he said.
To help carriers access to new markets, the commissioner said he wanted to negotiate EU-level air service agreements with countries such as China, Russia, the Gulf States, Japan, India and southeast Asian countries.
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