EU gets back in the logic game with possible big bang on the cards

Victoria
By Victoria September 28, 2012 14:41

EU gets back in the logic game with possible big bang on the cards

The European Union (EU) announced yesterday that it will implement tougher rules to ensure fair competition and protect its airlines, saying it would negotiate “new and more effective instruments to protect European interests against unfair practices” and “Archaic ownership and control restrictions” must also go as part of an international effort to ensure airlines get better access to capital. According to the statement the EU realized many ambitions of its airlines too late”. Carriers have long wanted cross-border consolidation, which would make the industry more sustainable.
The EU stated that fair competition clauses would be included in current bilateral air services agreements between EU and non-EU countries with EU-level air service agreements with countries such as China, Russia, the Gulf States, Japan, India and Southeast Asia put into place.
All this comes too late for the likes of Ryanair which has been setback time and again by the EU. It does show though that EU-based airlines are having an effect and their lobbying cash is working. Words are one thing and action is another – the EU is very good at talking a good game, now let us see if it will get into action. Those involved in the sale of TAP might be spitting at what could have been though as it is unlikely that legislation will come in time for them. It does mean that whoever buys TAP though could well be in for a quick gain.
Meanwhile it is Ding Ding, seconds out for round six, in the never ending WTO saga. The EU yesterday filed a request for the WTO to grant $12bn in annual sanctions, following, it says, Boeing’s failure to address “the clear verdict it suffered in the WTO’s March 2012 final judgment”. It is the largest WTO penalty ever requested. Boeing and indeed Airbus, in March 2012, had been given a six months reprieve to implement the judgment in full. Airbus were obviously quicker off the mark as in a filing with the WTO, it became clear that Boeing has failed to implement the judgment. With that failure, the case moves to its next phase: sanctions following confirmation that Boeing continues to distort the marketplace with taxpayer-funded subsidies.
This is quite funny seen as Airbus through EADS and Boeing have been funded by government R&D since inception almost. Yes Boeing gets a fair bit via NASA for new aircraft development but EADS has had its share of “support” let us not forget that bond issue or that “loan” a few years back. Then there is the real benefit from the EADS/BAE Systems merger – the fact that all that government R&D money can filter between all layers of the two combined. It is all fun and games. However in all seriousness this does look like the closest either side has come to being in a serious position to gain, that said Boeing say that they are not bothered by the whole thing – cue counter claim.

Meanwhile the levels of control asserted by some companies in the aftermarket is about to blow-up. Airline Economics has detailed information of a possible series of cases that will have widespread ramifications across the aftermarket that will affect everyone– read about that one in future issues of Airline Economics.

Victoria
By Victoria September 28, 2012 14:41
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