Aviation Treaty Hoped to Take Flying to New Heights | Business| Economy and finance news from a German perspective | DW | 29.05.2006
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Aviation Treaty Hoped to Take Flying to New Heights

Amid growing air traffic in Europe's skies, the EU has signed an agreement with southeast European nations to create a common aviation area. It aims to help both passengers and the aviation industry.


It's hoped the aviation industry will take off once the treaty is implemented

The goal of the far-reaching treaty is to create a common aviation market for the EU and its neighboring countries by 2010.

The EU signed the agreement in early May this year with the transport ministries of eight southeast European partner countries to form a European Common Aviation Area (ECAA). The treaty is expected to be officially approved by Brussels on June 9.

A stepping stone to the EU

Experts are confident that the agreement will benefit both passengers and the aviation industry.

"It's better for both the industry and for the consumers if we have common rules and open up markets," said Johannes Baur, who is responsible for aviation matters in the European Commission. If all goes according to plan, Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania, Serbia and Montenegro and Kosovo will be part of the ECAA by 2007.

Montenegro wird unabhängig

Montenegro, which opted for independence last week, could also benefit

"That means that these countries will find a link to the EU," said Baur. "For example when it comes to keeping to the standards within the EU. They will also be a part of the European market as complete and equal members."

Ever since 2001, air traffic between the EU and the eight southeastern European nations has increased sharply and continues to climb. It's expected to increase a further six percent per year in the coming years.

Bigger opportunities with rising competition

Despite the rapid growth of air traffic volume, ticket prices remain high. For instance, passenger numbers from Albania rose by 21 percent last year but the increase didn't result in lower air travel costs.

Agron Nushaj, director of the department of transport policy at the Albanian Transport Ministry, believes that opening up markets is still enormously important.


Germanwings too plans to fly to Albania

"When we open up the market, we give airlines the possibility of having a share in the European market without restrictions and as equal partners," said Nushaj. "Several different European airlines have offered to be operational in the Albanian market. In addition to the 13 airlines who fly from the only airport in the country, this year British Airways and Germanwings are coming to Albania."

But Nebojsa Starcevic, deputy general director of the state-run Serbian airline JAT believes that discount airlines will not be flying to Serbia for at least a year because they don't really sense an economic opportunity there. JAT wants to dominate the southeastern European market and try to unseat the leader at present, Hungarian airlines Malev, by offering cheaper tickets.

The European Commission's Bauer, however, believes that the ECAA agreement also offers big opportunities for businesses in the southeastern countries.

"It's true that it will lead to stronger competition," Baur said. "But the aviation companies in the countries of southeastern Europe have the advantage of knowing these markets really well. So if they prepare well for the opening of the markets, they then will have a good chance of profiting from the agreement and eventually be able to compete in the future in alliance with big European airlines such as Air France or Lufthansa."

Good news for tourism

It's not just individual aviation companies that stand to benefit from the single-skies agreement. The EU's eastward expansion in 2004 has shown the positive effects that the entry of ten new members into the bloc has brought for both consumers as well as airlines. While an increase in the number of flights likely will translate into cheaper air alternatives in Europe, it's also expected to result in a positive ripple effect in the entire tourism sector.

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