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.


Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

Updated 20 July 2018
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Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

JEDDAH: A potential deal to buy a stake in petrochemical maker SABIC would affect the time frame of Saudi Aramco's initial public offering (IPO), the oil firm's president and CEO Amin H. Nasser said Friday. 

The IPO of around 5 percent of Aramco, which was initially to take place this year but is now more likely to happen later, would be the world's biggest listing, raising up to $100 billion.

Nasser said that buying a stake in a chemical company like SABIC would positively affect Aramco's revenue, Al Arabiya reported.

“We are still in the very early stages of the discussion to buy a stake in SABIC,” the Aramco CEO said.

“Aramco is ready for the initial offer and the timing remains subject to the state's decision.”

Saudi Aramco said on Thursday it is looking at the possibility of buying a stake in SABIC, a move that could boost the state oil giant’s market valuation ahead of the planned IPO.
Aramco said in a statement that it was in “very early-stage discussions” with the Kingdom’s Public Investment Fund (PIF) to acquire the stake in SABIC via a private transaction. It has no plans to acquire any publicly held shares, it said.
In a separate statement, PIF also said talks about a sale were in early stages. “There is a possibility that no agreement will be reached in relation to this potential transaction,” it said.