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Ec Competition Rules: Exemptions

Volume 492: debated on Thursday 28 January 1988

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asked Her Majesty's Government:Whether they will give details of the list of exemptions from the competition rules of the Treaty of Rome that they referred to in their answer on 21st January, and how it is anticipated that such a list will benefit airlines and passengers under the recently agreed European Community Aviation package.

The Parliamentary Under-Secretary of State, Department of Transport
(Lord Brabazon of Tara

The exemptions concerned are laid down in Article 2 of EC Regulation 3976/87, which reads:

  • "1. Without prejudice to the application of Regulation (EEC) No. 3975/87 and in accordance with Article 85(3) of the Treaty, the Commission may by regulation declare that Article 85(1) shall not apply to certain categories of agreements between undertakings, decisions of associations of undertakings and concerted practices.
  • "2. The Commission, may, in particular adopt such regulations in respect of agreements, decisions or concerted practices which have as their object any of the following:
    • —joint planning and co-ordination of the capacity to be provided on scheduled air services, in so far as it helps ensure a spread of services at the less busy times of the day or during less busy periods or on less busy routes, so long as any partner may withdraw without penalty from such agreements, decisions or concerted practices, and is not required to give more than three months' notice of its intention not to participate in such joint planning and coordination for future seasons,
    • —sharing of revenue from scheduled air services, so long as the transfer does not exceed 1 per cent, of the poolable revenue earned on a particular route by the transferring partner, no costs are shared or accepted by the transferring partner and the transfer is made in compensation for the loss incurred by the receiving partner in scheduling flights at less busy times of the day or during less busy periods,
    • —consultations for common preparation of proposals on tariffs, fares and conditions for the carriage of passengers and baggage on scheduled services, on condition that consultations on this matter are voluntary, that air carriers will not be bound by their results, and that the Commission and the Member States whose air carriers are concerned may participate as observers in any such consultations,
    • —slot allocation at airports and airport scheduling, on condition that the air carriers concerned shall be entitled to participate in such arrangements, that the national and multilateral procedures for such arrangements are transparent and that they take into account any constraints and distribution rules defined by national or international authorities and any rights which air carriers may have historically acquired,
    • —common purchase, development and operation of computer reservation systems relating to timetabling, reservations and ticketing by air transport undertakings, on condition that air carriers of Member States have access to such systems on equal terms, that participating carriers have their services listed on a non-discriminatory basis and also that any participant may withdraw from the system on giving reasonable notice,
    • —technical and operational ground handling at airports, such as aircraft push back, refuelling, cleaning and security,
    • —handling of passengers, mail, freight and baggage at airports,
    • —services for the provision of in-flight catering.
  • "3. Without prejudice to paragraph 2, such Commission regulations shall define the categories of agreements, decisions or concerted practices to which they apply and shall specify in particular:
  • (a) the restrictions or clauses which may, or may not, appear in the agreements, decisions and concerted practices;
  • (b) the clauses which must be contained in the agreements, decisions and concerted practices, or any other conditions which must be satisfied."
  • The exemptions provided for in paragraph 2 were granted in recognition of the fact that, to date, the air transport sector has been governed by a network of bilateral and multilateral agreements between airlines and that the adjustment to a more competitive environment should be a gradual process to reduce disruption to services currently based on co-operation arrangements. The avoidance of such disruption is, of course, in the interest of passengers.These exemptions have therefore been given for a limited period and, to comply with Article 85(3) of the Treaty of Rome, conditions are attached to the exemptions which ensure that qualifying agreements do not impose restrictions which are not indispensable or afford the airlines concerned the opportunity to eliminate competition.