By Julia Fioretti
BRUSSELS, Dec 7 (Reuters) - The European Commission isconsidering new measures to tackle what it sees as unfaircompetition from non-EU airlines as part of a package ofproposals unveiled on Monday designed to boost thecompetitiveness of Europe's aviation sector.
The Commission, the EU executive, also asked nationalgovernments to give it a mandate to start talks on air transportagreements with a number of countries including China, Turkey,United Arab Emirates, Kuwait and Qatar.
The talks with the Gulf countries are likely to be fraughtwith difficulty since some European legacy carriers, notablyLufthansa and Air France KLM, accuse theGulf airlines of receiving unfair state subsidies and have beenpushing the Commission to address this in negotiations for airtransport agreements.
Emirates and Etihad reject the allegations.
The Aviation Package presented by Transport CommissionerVioleta Bulc and Vice President in charge of the energy union,Maros Sefcovic, contains a wide range of measures designed toimprove connectivity in the 28-member bloc, tackle airports'capacity constraints and charges and regulate the use of drones.
"It will keep European companies competitive, through newinvestment and business opportunities, allowing them to grow ina sustainable manner," Bulc said in a statement.
Europe's aviation industry, which contributes 110 billioneuros ($119 billion) to the EU GDP, has been hit by the rapidexpansion of the Gulf carriers and the rise of Asia as a majorair traffic hub. Its legacy carriers have also suffered at thehands of European low-cost players such as Ryanair andeasyJet.
Business lobby group BusinessEurope said it wanted betterimplementation of previous packages to ensure coordination andmanagement of European airspace.
"As a comparison, the United States controls the same amountof airspace, with more traffic, at almost half the cost," itsaid, adding it wanted to see an international level playingfield and better access to growing markets."
The other countries with which the Commission wants tonegotiate air transport agreements are Saudi Arabia, Bahrain,Oman, Mexico and the Association of Southeast Asian Nations.
Next year, the Commission plans to issue guidelines on thelaw on ownership and control of EU airlines to give legalcertainty to investors and airlines.
It will also "actively" pursue the relaxation of the ruleson the basis of reciprocity through bilateral aviation and tradeagreements.
While the limit on foreign ownership of EU airlines isclearly capped at 49 percent, there is less clarity on whatconstitutes effective control.
Etihad, for example, owns 29 percent of Germany's Air Berlin and 49 percent of Alitalia.
Reuters reported that the Commission would suggest looseningownership rules on Nov. 5.
The executive will also tackle the issue of airlinesemploying lower-cost workers overseas to avoid high labour costsin Europe by issuing a guide on the applicable labour law andconsidering whether legal changes are needed.
Europe's third-biggest budget airline Norwegian Air has, for instance, circumvented Norway's labour laws by basingsome of its crew and jets in countries such as Spain andThailand, while Ryanair has come under fire in some countriesfor using pilots employed through agencies, rather than directlywith the carrier.
EU member states were urged to complete the "Single EuropeanSky" project, in process for a decade and which would cut costsand emissions by merging national air corridors.
The Commission estimates that fragmentation of Europeanairspace costs at least 5 billion euros a year and up to 50million tonnes of CO2 emissions.($1 = 0.9246 euros) (Reporting by Julia Fioretti; editing by Philip Blenkinsop)
easyJet (EZJ)