EU aviation liberalisation aims face challenges

Subject

The European Commission's new aviation strategy.

Significance

The European Commission's new aviation strategy, published on December 7, largely reaffirms existing EU policy directions in the sector. These include the wish to address the commercial threat to European airlines represented by Gulf and Asian carriers. The strategy's main innovation is in raising the possibility of allowing more foreign investment in EU airlines. However, this is hedged with qualifications and contingencies. Overall, the Commission's proposals remain undeveloped.

Impacts

• A January 20-21 EU Aviation Summit will provide the first indication of reactions to the strategy and possible next steps.
• As in telecoms, EU policy faces a tension between supporting consumer rights and choice, and industry consolidation and investment.
• Airline ownership liberalisation could become a source of conflict with the United States.
• The implications of 'Brexit' for air travellers, especially on low-cost carriers, are likely to feature in the UK EU referendum campaign.
• The decision now expected in 2016 on a new London runway will be among the most disputed but significant moves on European airport capacity.