EU to seek air traffic deals with Gulf, Turkey, ASEAN countries

* EU to seek aviation deals with Gulf nations, Turkey

* Commission sees deals as way to boost European carriers

* Mandates will have clauses to limit duration of talks (Adds reaction from Airports association)

By Julia Fioretti

BRUSSELS, June 7 EU member states gave the green light on Tuesday for the European Commission to pursue air traffic agreements with the United Arab Emirates, Qatar, Turkey and countries in southeast Asia to try to support its airlines.

Europe’s aviation industry, which contributes 110 billion euros ($123 billion) to EU gross domestic product, has been hit by the rapid expansion of Gulf airlines such as Emirates , Etihad Airways and Qatar Airways, as well as shifting traffic flows to Asia.

The Commission, the EU’s executive, asked member governments in December to give it a mandate to start talks on air transport agreements with countries including China, Turkey, United Arab Emirates (UAE), Kuwait and Qatar.

Such agreements, now often done on a bilateral basis by individual governments, would set out where and how often foreign airlines could fly into the EU, and vice versa.

The Commission hopes the deals will give European airlines greater access to some of the world’s fastest growing aviation markets, notably the Gulf countries and Turkey, and bring billions of euros in economic benefits.

“Once agreed, these agreements will offer new business opportunities to the whole aviation sector, new routes and better fares to passengers, whilst guaranteeing a level playing field to our companies,” EU Transport Commissioner Violeta Bulc said.

Some European carriers, notably Lufthansa and Air France KLM, as well as major U.S. airlines, have accused Gulf carriers of receiving unfair state subsidies, allegations they have rejected.

The Commission will be able to seek fair competition and financial transparency provisions in the talks, a key demand of countries such as France and Germany.

ACI EUROPE, the trade association for Europe’s airports, said EU-level agreements should replace “often-restrictive bilateral aviation agreements”.

“Airports have become network developers and they need full freedom to attract airlines to serve their destination. Restricting market access should no longer be allowed to constrain connectivity,” ACI EUROPE Director General Olivier Jankovec said.

For the first time, member states have introduced a sunset clause in the mandates to ensure that talks on bilateral agreements can resume if the EU-level ones drag on for too long.

EU member states cannot engage in bilateral talks over aviation deals as long as the EU-level negotiations are ongoing. That has sparked concern among some Gulf carriers such as Emirates that the EU-level mandates could be used to freeze their flying rights in Europe.

The mandates for Turkey and the Association of Southeast Asian Nations (ASEAN) – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Thailand, the Philippines, Singapore and Vietnam – will last four years, whilst the ones for Qatar and the UAE would be for three years.

The Commission will be able to ask for an extension if the talks are progressing. It is, however, expected to challenge the idea of a sunset clause at the EU’s top court, an EU official said.

($1 = 0.8791 euros) (Editing by David Clarke)

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