Air fares and air cargo rates (third phase)

This regulation sets out to liberalize price formation for Community air services.

ACT

Council Regulation (EEC) No 2409/92 of 23 July 1992 on passenger fares and air cargo rates [Official Journal L 240 of 24.08.1992].

SUMMARY

This Regulation repeals Council Regulation (EEC) No 2342/90.

The Regulation applies to the criteria and procedures governing establishment of the air fares and air cargo rates charged by air carriers on air services within the Community.

Member States may not withhold approval of fares and rates charged by Community carriers if the fares and rates are reasonably related to the applicant carrier's total costs. If they withhold approval, Member States must also take into account other factors such as consumers' needs, the competitive situation in the market and the need to prevent dumping. The fact that a proposed air fare is lower than that offered by another carrier is not sufficient reason for withholding approval. Air carriers may not charge fares or rates that are so excessively high as to disadvantage users or so low as to be unjustifiable.

Air fares offered to tour operators or the public and specifically combined with accommodation arrangements for the duration of the trip, and air fares for groups larger than six persons, will receive automatic approval.

Cargo rates may be set by free agreement between the parties to the contract of carriage.

Air carriers must submit their proposed air fares for scheduled air services in the form prescribed by the Member State concerned. An air fare for a scheduled air service will be considered as approved unless, within 30 days of submission, the Member State(s) concerned has (have) notified disapproval to the applicant carriers in writing, giving reasons.

Member States have one month to refer the Commission's decision to the Council.

A Member State may permit a Community air carrier to match an air fare already approved for a scheduled air service between the same pair of cities, it being understood that this does not apply to indirect air services which exceed by more than 40 % the length of the shortest direct service.

For a scheduled air service where competition is limited, a Member State whose interests are involved may request the Commission to examine whether an air fare complies with the conditions described in point 2 above.

Competition will be taken to be limited where:

• there are significant barriers to market entry;
• there are public service obligations;
• at most 30 000 seats are offered for sale per year in that Member State by a single air carrier.

The Commission has two months to issue its decision on whether the air fare complies with the conditions.

The Commission may investigate on its own initiative whether an air fare conforms to the provisions of the Regulation. Any Member State whose interests are involved has one month to refer the resulting Commission decision to the Council. The Commission is required to consult the representatives of air transport user organizations at least once a year on scheduled air fares.

Air carriers from third countries with traffic rights between Community airports are permitted to match the normal economy air fare or its closest equivalent, unless otherwise provided in an agreement between the Community and the third country.

In order to carry out its duties under this Regulation the Commission may obtain all necessary information. Where the information supplied is incomplete or incorrect the Commission may impose a fine of 1 000 to 50 000 euros. Also, where air carriers infringe the provisions of this Regulation, a fine of up to 10 % of annual turnover may be imposed. The decision may be referred for review by the Court of Justice that may cancel, reduce or increase the fine.

Context

Since 1 November 2008, Regulation (EC) No 2409/92 has been repealed and replaced by Regulation (EC) No 1008/2008 establishing common rules for the operation of air services in the Community. In particular, this Regulation introduces new rules on passenger fares and prices for the carriage of cargo.

Last updated: 19.11.2008