Plea for transatlantic coordination of competition law on air transport

Jeffrey Shane, Chairman of the ICC Air Transport Commission, said: “The problem affects not only manufacturers, but airlines as well. New airline alliances are redefining the competitive framework for transatlantic air services, but each appears to be subject to two, if not three sets of legal rules. The Boeing/McDonnell-Douglas case, which had enormous potential for disrupting transatlantic trade relations, underscores the importance of establishing clearer, more harmonized ‘rules of the road’ — particularly for the airlines providing services that link these two great markets.”

Emphasizing the need for more “coherence and predictability” for carriers, ICC calls for a new agreement on air transport services between the EU and the US, which would have clearly defined and transparent rules regarding airline competitive behavior as it affects the two trading blocs.

ICC says that while alliances and other forms of airline cooperation can be of benefit to airlines and users, “at the same time, it is imperative that these cooperative agreements be subject to fair and objective competition rules.” Given the number of competing jurisdictions entitled to apply their own legal standards — as in the currently pending case of British Airways and American Airlines — this is at present impossible, ICC maintains.

An ICC spokesman stressed that the organization is not arguing for identical competition laws, but rather for an understanding on principles and procedures and an eventual move toward a convergence of principles. ICC also recommends the creation of an effective transatlantic mechanism for the speedy resolution of intergovernmental disputes that can arise in relation to the provision of commercial air services.

In the longer term, ICC sees an EU/US agreement on competition as the first step towards a broader international understanding on competition laws and policies affecting air transport. “The agreement should be open to others to sign on,” said Jeffrey Shane. “But for the time being, we felt it made sense to begin with two major players whose policies with respect to competition in aviation have been the focus of much attention in recent months.”

The ICC statement is being submitted to ministers of transport and competition authorities in the more than 60 countries where ICC has national committees.