The Future of the Open Skies Agreements after the ECJ judgements - Legal and Economic Aspects (PDF)

Master's Thesis from the year 2006 in the subject Politics - International Politics - Topic: European Union, grade: A, University of Hamburg, language: English, abstract: Even though aviation is one of the driving forces of globalization, the airline industry itself remains far from being globalized: A framework of bilateral aviation agreements with rather restrictive national control on cross-border investment and competition mainly governs the civil airline industry. The Open Skies agreements between 11 EU Member States and the US can be seen as an attempt to introduce various liberal elements to the bilateral aviation agreements, while preserving the strict provisions on cross-border investment. However, the existence of the Open Skies agreements was put into question when on 5thNovember 2002 the European Court of Justice (ECJ) judged these agreements between the EU Member States and the US illegal under EU law, as they infringed both primary and secondary EU legislation. Moreover by declaring a mixed competence between the European Commission and the Member States in the field of external air transport, the ECJ judgment marked a decisive turn in the EU¿s history of air transport policy. The ECJ judgement thus entailed significant legal and economic consequences for the international civil aviation between the EU and the US. As to the precise future of the Open Skies agreements however, the ECJ remained evasive, imposing on the involved parties the burden of legal incertainty. Economically a sort of free trade area for air transport between the EU and the US, the two biggest aviation markets, seems the most reasonable solution, being of utmost importance in order to restructure the airlines operating in a context of market globalization and growing international competition. Politically though, the aviation sector has ever since been a sensitive issue, regarded as an instrument of foreign policy, national defense and national prestige. The future of the Open Skies has thus has been a topic of heated debate, not only in the scientific arena but as well in political and business circles. Particularly in view of the economic leverage of the EU and US aviation market, the decision about the future of the Open Skies agreements is likely to have a major impact on the way the international aviation industry will develop in the next decades. [...]