EU Takes Action on Aeroflot Payments

The European Commission has taken legal action against Cyprus, Ireland, Poland, Portugal, Slovakia and Spain over their bilateral air service agreements with Russia, sending each of the member states a letter of formal notice.

The fact that European Union airlines have to pay to fly over Siberia on their way to Asian destinations can not only make the flights more expensive, but can also lead to unfair competition between EU and non-EU airlines. It is estimated that in 2008 alone, the EU carriers concerned paid around USD 420 million in charges – most of it directly to the Russian airline Aeroflot.

The Commission is "concerned that the agreements may hinder competition between European airlines and provide the basis for Siberian overflight charges that may be illegal under EU anti-trust rules," said the EC in a statement.

"The view of the European Commission is that air transport agreements must treat all EU airlines equally and respect antitrust rules. Otherwise some EU airlines may be treated less favourably than their direct competitors or face paying unreasonable additional charges which can get passed on to consumers in higher air fares," said the EC.

Russia is one of the few countries in the world that fails to recognise that all EU carriers must be treated equally, and that the terms of any bi-lateral agreement must include an "EU designation" clause and apply to all. This creates serious practical problems, putting at risk traffic rights, for example, for airlines taken over by a carrier from another EU Member State.

Member States have two months to respond to the letters of formal notice.