Deregulation 2 - The EU's Open Skies Policy

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  • The EU's Open Skies' Policy
    • Third Package
      • Airlines are permitted to fix their own fares and cargo rates
      • Open access, whereby EU airlines can establish themselves in any other member state and operate services with no capacity restrictions
      • Common criteria have to be applied for granting operators' licences
    • Airline Market - within the EU, April 1997
    • Effects
      • New routes - particularly from smaller airports - because of the high prices of larger airports (and low availability)
      • New entrants tend to low-cost carriers (now almost 100 in the EU)
      • Pressure on national airlines to compete with low-cost carriers through competitive fares
      • Massive grown in the passenger numbers particularly for low-cost carriers (6-9% since deregulation)
    • Alliances not considered to be anti-competitive
    • Generally made the market more contestable and benefited consumers.
    • Environmental Question

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