Bulgaria Faces EC Infringement over Aviation Deal with Russia

An image dated 24 July 2008 showing the logo of Russian airlines the Aeroflot, Frankfurt, Germany. EPA/BGNES

The European Commission has started an infringement procedure against Bulgaria over the latter's bilateral aviation services agreement with Russia.

Thus, Bulgaria has joined a total of 23 other EU member states already facing the same infringement procedure on part of the European Commission.

On Wednesday, the Bulgarian government has been notified by the EC with a letter on the start of the infringement procedure; the same kind of letter was received Wednesday by the Czech Republic, the Bulgarian National Radio reported.

The EC is concerned that the Bulgarian-Russian aviation services agreement – not unlike the bilateral agreements with Russia made by the other EU member states in question – may hinder competition, breach EU rules on freedom of establishment, and provide a basis for Siberian overflight charges which may be illegal.

The legal framework for air transport between countries is traditionally defined through bilateral air service agreements (known as ASAs) between the respective governments. Within Europe, the situation changed significantly in the early 1990s when a single European aviation market was created.

The so called "Open Skies" Court rulings of 2002 were a further crucial milestone. The Court stated that provisions limiting the benefits of ASAs to nationals of the Member States concerned are in breach of the Treaty's provisions on freedom of establishment. Hence, ASAs between Member States and third countries must now include an "EU designation" clause.

With the exception of a very small number of third countries, ASAs between Member States and third countries have been adapted either bilaterally (between a single Member State and a third country), or through "horizontal agreements" (between the EU and a third country). But Russia is still one of the few third countries in the world that does not accept this fundamental change.

In addition to the problem of EU designation (freedom of establishment), EU airlines are obliged to pay Siberian overflight charges for routes to many Asian destinations. This may be in breach of international law and incompatible with EU competition law. The Siberian overflights issue was negotiated between the European Commission and the Russian government in 2006.

In November 2006, an agreement to phase out Siberian overflight duties was signed by the Commission, the Council Presidency and the Russian Transport Minister Igor Levitin. Russia has, however, never implemented it as it has linked its implementation with the need to first be allowed to become a fully fledged WTO partner. Since then, Member States efforts to address the issue with Russia bilaterally have failed.

With respect to Siberian overflight charges, EU carriers are de facto forced into agreements with their competitor, Aeroflot. In 2008 alone, EU carriers paid around USD 420 M – most of it directly to Aeroflot.

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