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Common Market Adopts Airline Deregulation Plan

December 8, 1987

BRUSSELS, Belgium (AP) _ The European Economic Community on Monday adopted a plan to lower air fares and open European air routes to more competition in a step toward deregulating the industry.

Under the plan approved by the 12 EEC transport ministers, deals between individual member nations and their flagship air carriers will be broken up starting Jan. 1 and new carriers and more routes will be allowed.

″I hope we shall be able to see real benefits flow to the citizens of Europe,″ said Stanley Clinton Davis, transport commissioner for the EEC, also known as the Common Market.

Peter Sutherland, EEC competition commissioner, said, ″I would have preferred to go further, but I was happy to accept the package.″

He said the immediate benefits for travelers would be modest but ″for the first time we have the machinery for moving the liberalization process forward.″

He said the plan was a first step towards deregulating air travel in the Common Market by 1992.

The package is to be in effect for three years, and then further fare reductions will be considered. Europe’s air fares have long been higher than those on U.S. routes of similar length.

Provisions of the plan include broader use of discount and deep-discount fares, opening existing routes to more airlines and creating new routes, especially between regional airports.

An EEC transport official said the new deal will ″severely limit″ the governments’ say in setting air fares.

But the plan also has exceptions and limitations.

All Greek and most Danish airports are exempt for three years from provisions liberalizing routes from central to regional airports. Similar exemptions will apply to six Italian and eight Spanish airports.

Restrictions on discount fares will continue making cheaper flights unavailable to businessmen, the most frequent air travelers.

Sutherland said, ″It’s better to move this way than the confrontational way, which would take longer.″

An obstacle was cleared last week when Britain and Spain ended their dispute over the Gibraltar airport.

Both countries claim Gibraltar, and last June Spain objected to the listing of the Gibraltar airfield as a British regional facility. It threatened to veto the plan, saying the listing would undermine its claim to the territory.

Under the settlement, Britain and Spain agreed to exclude the one-runway Gibraltar airport from the deregulation package.

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