The Treaty of Rome and Air Transportation

A cornerstone of the dream of a unified Europe was that a reliable, common transportation sys­tem exist for the moving of people and goods. The Treaty of Rome incorporated this realiza­tion into Articles 85 and 86, which required the implementation of a common transport policy within the Community. Nevertheless, when the Council in 1962 adopted Regulation 17, which implemented those provisions of the Treaty, both air and sea transport were exempted.

The EC went further in 1968 and adopted a broad transportation policy applicable to commercial rail, road, and inland waterways, but not to sea and air transport. Air transporta­tion policy within the EC was a difficult issue since each of the member states had, since the Chicago Convention of 1944, regularly entered into bilateral agreements with other countries around the world. In addition, the airlines of Europe were heavily subsidized by their separate governments. They were gen­erally understood to be and were treated as public utilities, and were considered part and parcel of the national image projected by the government. There was, therefore, very little progress made in the area of air transportation policy prior to 1986.

The Treaty of Rome also incorporated into Articles 85 and 86 specific provisions prohib­iting anticompetitive activities and policies in the field of transportation by Member States. It was realized that any true integration of Euro­pean economies would be impossible unless and until barriers to the smooth flow of commerce between them were removed.

By the middle of the 1980s, the competition mles of the Treaty of Rome had been applied to other forms of transportation and to virtually all other areas of commerce. Within the international aviation community, pressure had been building for some time to apply these rules to commercial aviation. The fact was that commercial aviation in the European Community had been left out of the integration that had proceeded with all other forms of commerce. At the same time, the Community found it hard to ignore the competitive effects of deregulation in the United States as U. S. airlines adopted policies and procedures in the running of their companies that produced more efficient oper­ations, reduced overhead, and allowed reduced rates and fares. While some of the harsher realities of deregulation that had occurred in the United States were closely evaluated in Europe, it was realized by all concerned that Europe was going to have to compete with these American airlines on the international scene sooner or later. Next, we will look at the effect that American deregulation had on the European Union.

Endnotes

1. http://www. loc. gov/exhibits/marshall/m9.html.

2. http://www. loc. gov/exhibits/marshall/ml2.html.

3. France, Luxembourg, Italy, West Germany, Belgium, and the Netherlands.

4. Tom Reid, Washington Post.

5. In addition to the Six, there now were Ireland, Greece, Denmark, the United Kingdom, Spain, and Portugal.

6. Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.