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Aviation History
1996
1996 - 0005.PDF
EDITORIAL UK Editorial Enquiries Editorial Fax Editor Allan Winn Editor's PA Lisa Jenkins Deputy Editor Forbes Mutch News Editor Andrew Chuter Operations/Safety Editor David Learmount Business Editor Kevin O'Toole Commercial Aviation Editor Kieran Daly Defence Aviation Editor Douglas Barrie Aviation Research Editor Jennifer Pite Technical Reporter Andrew Doyle Editorial Assistant Kate Sarsfield Production Editor Chris Thornton Art Editor Alexis Rendell Layout Sub-Editor Annabel Wells Technical Artist Tim Hall Technical Artist David Hatchard Technical Artist Giuseppe Picarella Spaceflight Correspondent Tim Fumiss Photographer(Europe)Mark Wagner Picture Librarian: Kim Hearn EUROPE/MIDDLE EAST European Editor Julian Moxon +44(181)652 3842 +44(181)652 3840 +44 (181) 652 3882 +44(181)652 3882 +44(181)652 3852 +44 (181) 652 3843 +44(181)652 3845 +44(181)652 3835 +44 (181) 652 3837 +44 (181) 652 3834 +44(181)652 3847 +44(181)652 3838 +44 (181) 652 3842 +44(181)652 3850 +44(181)652 3828 +44 (181) 652 3848 +44(181)652 8047 +44 (181) 652 8047 +44(181)6528054 +44(1237)471960 +44(181)944 5225 +44 (181) 652 3427 COMMENT +33(1)46 2947 61 [Fax+33 (1)46 29 47 49] Munich Correspondent Andrzej Jeziorski +49 (89) 6891041 [Fax+49 (89) 6891045] Paris Correspondent Gilbert Sedbon +33 (1) 48 25 52 61 Israel Correspondent Arie Egozi +972 (3) 9671155 Moscow Correspondent +7 (095) 393 4717 Alexander Velovich [Fax +7 (095) 393 4717] AMERICAS American Editor Graham Warwick +1 (770) 587 2927 [Fax+1(770) 5941534] Washington Correspondent Ramon Lopez +1 (703) 836 7443 [Fax+1(703) 836 8344] West Coast Correspondent Guy Norris +1 (714) 252 8971 [Fax +1 (714) 252 8972] ASIA PACIFIC Asian Editor (Singapore) Paul Lewis Australian Correspondent Paul Phelan +65 226 3188 [Fax+65 2271769] +61(70)532 791 [Fax +61 (70) 533 003] DISPLAY ADVERTISEMENT SALES UK and EUROPE Display Advertising Enquiries +44 (181) 652 3315 Display Advertising Fax +44 (181) 652 8981 Group Advertisement Director Trevor Parker +44 (181) 652 3319 Secretary Lisa Devlin +44 (181) 652 3315 Advertisement Production Display/Classified Howard Mason +44 (181) 652 3267 EAST EUROPE, GERMANY, SCANDINAVIA, UK Senior Area Manager Robin Gordon +44 (181) 652 4998 NETHERLANDS, PORTUGAL, SPAIN, UK Area Manager Janice Lowe FRANCE Sales Director France Pierre Mussard ITALY Representative Romano Ferrario NORTH AMERICA Vice-president US Sales John Tidy Sales Director East Coast Robert Hancock Sales Director Mid-West & Canada GeneGlendinning Traffic Manager Debbie Kolb MIDDLE EAST Robin Gordon ASIA, AUSTRALIA +44(181)652 3316 +33 (1) 46 29 46 29 [Fax+33 (1)40 93 03 37] +39(2)6603 4435 [Fax+39 (2) 6603 4367] +1(714)7561057 [Fax +1 (714) 756 2514] +1(703)836 7444 [Fax+1(703) 836 7446] +1 (708) 304 5588 [Fax+1(708) 304 9559] +1(212)545 5376 [Fax+1(212) 679 9455] +44(181)652 4998 Singapore Account Manager Karen Kwan +65 226 3188 [Fax +65 223 6960] CLASSIFIED & RECRUITMENT Group Advertisement Manager Gareth Pask International Sales Executives Mo Buttivant Judith Slann Classified Sales Executives Sarah Harvey Simon Lees Lucy Middelboe Enquiries ' Classified USA Gail Tavelman Classified Asia/Pacific Karen Kwan Publisher Gavin Howe +44 (181) 652 4814 +44 (181) 770 3032 +44 (181) 770 3011 +44 (181) 770 3010 +44(181)770 3027 +44(181)770 3030 +44(181)6616373 +1(212)545 5403 +65 226 3188 +44 (181) 652 3675 BANNED AID? THE EUROPEAN Commission has set some far-reaching policies and made some bold decisions in its time. Some of them have been good; some of diem bad. Few have been as misguided as its latest deci sion over support for Iberia Airlines (Flight International, 20 December, 1995-2 January, P5). That is not because Iberia does not deserve another chance to set its house in order: it is because in reaching this decision, the EC has sabotaged its own policies on state aid, and through that, sac rificed its own credi bility as an economic regulator. The wisdom of allowing the Spanish Government, through a state-owned holding company, to continue to support Iberia will be judged by history. It may prove to be tJiat a second helping of "one time, last-time" finance does indeed enable that carrier to regain its footing and become financially self-supporting. It may not: ulti mately, the commercial success of any under taking depends more on its ability to provide a service that the paying public wants at a price it can afford than on any amount of support, no matter from where that support comes. What will be judged much more harshly by history tian Iberia will be the performance of the EC (and more particularly of transport commissioner Neil Kinnock). In that area, no judgement could be too harsh. The EC has, in recent months, been trying to establish itself as the correct and logical instrument through which tie members of the European Union should conduct their aviation relations with the outside world. It has famously tried (thus far without any success) to intervene in the process of establishing bilater al and multi-lateral air-services agreements with third countries. If its performance in die area of state aid to airlines is a guide to its com petence, then that lack of success is wholly unsurprising, and wholly justified. State aid is an emotive subject, but it is also one on which the member states of tie EU (and many others) want to see a clear and unambiguous European policy developed. Without it, there will never be tie "level play- "The EC has sabotaged its own policies on state aid and through that, sacrificied its own credibility as an economic regulator" ing field" for which so many have searched in recent years. The starting point for any clear policy on state aid must surely be tie definition of what is state aid: it is here that, far from clarifying tie issue, commis sioner Kinnock has created only confu sion. State aid, as far as most people under stand it, embraces any funding which comes from the taxpayer as the result of govern ment policy, rather than from ordinary commercial sources investing for a com mercial return. To most people, if an air line receives money from a state-owned, state-controlled body which it would not be able to obtain from an independent bank, finance house or otier investor, then that money is state aid, no mat ter how it is described. To most people, tierefore, tie Ptas 87 bil lion ($700 million) which Iberia is to receive from the Spanish state holding company is state aid, not a trade investment by a normal commercial organisation seeking a normal commercial return. If tiat is so, tie EC's pre tence tiat tie Iberia investment is not state aid destroys the whole basis on which the previ ously understood policy existed. If tie EC does believe tiat an airline should only be given a "one-time, last-time" injection of funds from its national government, tien it had no justification for ruling in favour of Iberia's refinancing. If it does not believe in tie "one-time, last-time" policy, tien it should not pretend that it does — but it needs to find a new, credible policy, very quickly indeed. Many European airlines (and their govern ments) have accepted tiat the bad old days of state sponsorship are over. Having taken often expensive and painful steps to bring their trad ing practices in line witi tiose of tie free-mar ket economy, tiey look now witi dismay at EC actions which, no matter how politically expe dient or defensible they may be, have put tiose who have complied witi previous EC policy at maximum disadvantage. The taxpayers and airlines of the EU deserve much better than that from their reg ulators. • FLIGHT INTERNATIONAL 3 - 9 January 1996 3
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