Under the system of the EC Treaty air transport is the subject of special rules which confer particular powers on the Council. In the exercise of its powers, that institution adopted in particular three packages of measures (in 1987, 1990 and 1992) designed to guarantee freedom to provide services and free competition.

The relations between the Member States and the USA in this area are based on bilateral agreements which confer on the carriers designated by the parties authorisations to fly over the territory of a contracting State. Despite repeated requests, the Council - considering that the Member States have retained their competence in relations with non-member countries as regards aviation - never conferred on the Commission a full mandate to negotiate with the United States authorities. Only a limited mandate was conferred in 1996 (after the conclusion of the disputed agreements), which was not followed, however, by the conclusion of an agreement by the Community.

From 1992 the USA made proposals to various Member States for the amendment of the bilateral agreements concerning air transport, with a view to bringing them into line with a particularly liberal model agreement ("open skies" agreement). Particular features of that model agreement are the right to operate flights between any point in the United States and any point in the European countries; unlimited capacity and frequencies on all countries; particularly liberal rules on fares, charter flights and computerised reservation systems. A fundamental element of the "open skies" model agreement is a complete exchange of traffic rights: apart from the right of an air carriers to transport passengers from the country of origin to another country and vice-versa, the model agreement provides for the right to transport passengers from two countries in an aircraft of a third country on a route with origin/destination in that country. In practice, this allows United States carriers access to all Community routes.

The conclusion (between 1995 and 1996) of similar amending agreements on the "open skies" model is specifically challenged by the Commission in the actions in question (the situation is in part different as regards the United Kingdom, which is charged only with inserting the "nationality clause" in the Bermuda II Agreement of 1977).

The Advocate General, whose views are not binding on the Court, has delivered his Opinion today. It is the task of the Advocates General, acting with complete independence, to propose to the Court a legal solution in the cases for which they are responsible.

(a)     Infringement of the Community's external competence

Advocate General Tizzano considers that, in the absence of an appropriate basis in an express legislative provision (as is the case here), the necessity to conclude an international agreement in order to attain one of the objectives of the Treaty may give rise to an exclusive external competence of the Community only where such necessity is formally affirmed by the competent Community institutions. Since the Council considered there was no necessity to conclude, at Community level, an agreement of the "open skies" type with the USA, contrary to the Commission's view on the matter, the Advocate General considers that the claimed exclusive competence of the Community to conclude such an agreement cannot, therefore, be founded on its alleged "necessity".

On the other hand, the Advocate General considers that, by virtue of the case-law of the Court of Justice, whenever the Community adopts common rules in a given sphere (on the internal level), the Member States lose the power to contract with non-member countries obligations which affect those rules. Accordingly, in matters covered by the common rules, the Member States may not under any circumstances conclude international agreements: any steps taken unilaterally would be incompatible with the unity of the common market.

That said, following an analysis of the various complaints raised by the Commission in these cases, the Advocate General considers that the disputed agreements may affect the common rules only so far as concerns the air fares chargeable by United States carriers on intra-Community routes and the computerised reservation systems. Those matters are governed by Community regulations (Nos 2409/92 and 2299/89 respectively) and accordingly come within the exclusive external competence of the Community.

The Advocate General considers, therefore, that the defendant Member States (so far as this point is concerned, not including the United Kingdom) were not entitled to undertake international obligations in such matters.

(b)     The infringement relating to the right of establishment

The Commission claimed that the bilateral agreements with the USA contained a clause (" nationality clause") which allows each party to refuse the rights provided for in the agreement to carriers designated by the other State but not owned or controlled by nationals of that State.

The Advocate General considers that, by virtue of that clause, the defendant Member States do not accord to the airlines of the other Member States which are established in their territory the same treatment as that accorded to their national airlines. Only the national airlines have - in any event - the right to obtain from the United States authorities the authorisations required to operate the air transport services provided for in the bilateral agreements. On the other hand, the "nationality clause" cannot be justified on the basis of the exception on grounds of public policy. Accordingly, according to the Advocate General, the nationality clause is contrary to the rules governing the right of establishment.

(c)     Provisions predating the entry into force of the EC Treaty

In the view of the Advocate General, these provisions of the agreements that are contrary to Community law do not predate entry into force of the EC Treaty and therefore cannot be justified on that ground. If, however, the Court were to reach a different conclusion, he considers that the Member States concerned have not done everything in their power to bring those provisions fully into line with the Community legislation.

Conclusion

The Advocate General therefore proposes that the Court should declare that

(a)    Denmark, Sweden, Finland, Belgium, Luxembourg, Austria and Germany have infringed the rules on the division of powers between the Community and the Member States by inserting in the "open skies" agreements rules relating to the fares that United States air carriers may charge on intra-Community routes and to computerised reservation systems (CRSs).

(b)    all the defendant Member States have infringed the Community principle of freedom of establishment by maintaining or inserting the nationality clause in the "open skies" agreements.

Unofficial document for media use only; not binding on the Court of Justice. Available in all the official languages. For the full text of the Opinion, please consult our Internet page www.curia.eu.int  at approximately 3pm today. For further information please contact Fionnuala Connolly: Tel: (00 352) 4303 3355; Fax: (00 352) 4303 2731 Pictures of the hearing are available on "Europe by Satellite" European Commission, Press and Information Service, L-2920 Luxembourg Tel: (00 352) 4301 35177; Fax: (00 352) 4301 35249, or B-1049 Brussels, Tel: (00 32) 2 2964106, Fax: (00 32) 2 2965956, or (00 32) 2 301280