EU lawmakers act to address ‘unfair’ airline competition rules

Some EU airlines, notably Air France-KLM and Lufthansa, have long complained about what they see as unfair competition from carriers such as those in the Gulf region. (Reuters)
Updated 20 March 2018
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EU lawmakers act to address ‘unfair’ airline competition rules

Non-EU carriers could see their rights to fly in the bloc revoked if they or their home countries engage in “unfair” competitive practices under rules voted on by a European Parliament committee on Tuesday.
Some EU airlines, notably Air France-KLM and Lufthansa, have long complained about what they see as unfair competition from carriers such as those in the Gulf region — Emirates, Etihad and Qatar Airways — whom they accuse of receiving illegal state subsidies.
The three airlines have vehemently denied such claims.
While the rules passed by members of the European Parliament’s transport committee on Tuesday are not the final version of the law, they represent a hardening of the original European Commission proposal.
“The pressure from highly subsidized third country carriers is increasingly noticeable. It potentially undermines a level playing field in the market, at the expense of European airlines,” said Markus Pieper, the EU lawmaker who is steering the legislation through the European parliament.
“Particularly carriers from the Gulf region, Turkey, China and Russia have strong state connections which can cause market distortions.”
The proposal would allow EU governments and airlines to submit complaints to the European Commission about alleged discriminatory practices they face in non-EU countries or illegal subsidies benefiting non-EU airlines.
The version passed by the European Parliament would see the Commission being able to impose “provisional redressive measures” on third country airlines even before an investigation has been concluded to prevent irreversible injury.
The provision was pushed by the second largest group in the Brussels legislature, the Socialists and Democrats.
The Commission — the EU executive — had not originally proposed curtailing airlines’ flying rights as these are typically granted on a bilateral basis between governments.
Instead it had proposed financial penalties or other measures such as a suspension of ground services.
The Commission has denied that the proposed regulation is a protectionist measure, but many EU governments oppose it on the grounds that it could hurt transport links to their countries.
The Gulf airlines have faced similar pressure in the US.
Qatar recently agreed to release detailed financial information about state-owned Qatar Airways after talks with the US government.
EU lawmakers will have to reach an agreement with member states on a final version of the EU regulation before it can take effect, meaning it will likely undergo further changes.


Kobe Steel posts first profit in three years despite data fraud scandal

Updated 27 April 2018
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Kobe Steel posts first profit in three years despite data fraud scandal

TOKYO: Kobe Steel, Japan’s third-biggest steelmaker, on Friday posted its first annual profit in three years, even after admitting to falsifying quality data, a scandal that affected hundreds of customers and hit Japan’s manufacturing prowess.
Kobe Steel reported profit of ¥63.19 billion for the year ended March 31, against a loss of ¥23.05 billion a year earlier.
The result was above its own forecast of ¥45 billion and an estimate of ¥49.56 billion among seven analysts surveyed by Thomson Reuters.
The company predicted a ¥45 billion profit for the year to March 2019, compared with a mean profit forecast of ¥44.62 billion from six analysts.
Kobe Steel, which supplies steel and aluminum parts to manufacturers of cars, planes and trains around the world, admitted to supplying products with falsified specifications to more than 600 customers and admitted the data fraud has been going on for nearly five decades.