U.K., Swedish Airline Pacts With Russia Rebuked by EU
The European Union threatened lawsuits against seven more EU nations including the U.K., Sweden and Italy for allowing Russian fees on airlines that fly over Siberia, widening legal action begun three months ago.
The European Commission said the aviation agreements that those three countries, along with the Netherlands, Belgium, Denmark and Luxembourg, have with Russia may violate EU rules by including provisions on Siberian overflight charges. European airlines pay the fees to Russian carrier OAO Aeroflot for the right to fly between Europe and Asia.
“This is in breach of EU antitrust law whereby airlines should not be forced into concluding a commercial agreement with a direct competitor,” the commission, the 27-nation bloc’s regulatory arm, said in a statement today in Brussels. The commission issued similar warnings against Germany, France, Austria and Finland in October.
Russia is the only country in the world to charge for overflight rights and the fees affect flights between Europe and Japan, China and South Korea by airlines including British Airways Plc, Air France-KLM Group and Deutsche Lufthansa AG. The policy is a relic of the Cold War, when Russian airspace was out of bounds and Russia excluded Siberia in return for a fee.
The EU says Russia has failed to follow through on a 2006 accord to end the charges, which U.S. carriers are spared because they don’t fly the trans-Siberian route. The levies cost European carriers about $420 million in 2008, according to the commission.
Legal Threat
Today’s legal threat involves an initial warning from the commission to the British, Swedish, Italian, Dutch, Belgian, Danish and Luxembourg governments through a “letter of formal notice,” which sets a two-month deadline for a reply. This process can lead to a lawsuit at the European court after a second commission warning letter.
In addition to targeting the provisions on Siberian overflight charges, the commission says the aviation agreements with Russia violate EU law by failing to apply the general terms equally to all carriers based in the bloc. This is required under Europe’s “open-skies” rules.
Among other things, the open-skies rules ensure that a takeover involving two carriers based in different EU nations doesn’t lead to the loss of traffic-route rights. Russia has threatened to deny Austrian Airlines AG flight rights following its takeover by Lufthansa, according to the commission, which says similar problems could arise for Lufthansa’s BMI unit, for Brussels Airlines NV because of Lufthansa’s stake in it and for KLM because of its merger with Air France.
Yet more EU countries may face legal action over their aviation agreements with Russia. The commission said it is “actively assessing the compliance with EU law of the remaining member states’ bilateral aviation agreements with Russia.”
To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
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