I'd think any Airbus customer qualifies. ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/03/12/f= inancial1359EST0152.DTL ---------------------------------------------------------------------- Tuesday, March 12, 2002 (AP) EU proposes duties on foreign airlines benefitting from government subsidies PAUL GEITNER, AP Business Writer (03-12) 10:59 PST BRUSSELS, Belgium (AP) -- The European Union's head office proposed rules Tuesday that would allow it to levy duties on U.S., Swiss and other foreign airlines if it feels they are unfairly benefiting from government subsidies. The European Commission said it drafted the regulations to fill a "legal vacuum" and protect its own struggling carriers in the wake of big government bailouts elsewhere following the disruption to air travel since Sept. 11. Taking particular aim at "states neighboring the EU," the commission said "massive public aid" provided by governments to their airlines could threaten the viability of EU airlines. Switzerland, which is not part of the EU, rescued its national carrier Swissair from bankruptcy last fall with a public-private bailout that included $1 billion in government money. The airline now dubbed Swiss competes with EU carriers not only on long-haul routes but within Europe as well. "They fish in their European neighbors for passengers that they can transport via Zurich," said Uwe Weinreich, an airline analyst at Hypovereinsbank in Munich, Germany. "That would be unfair to allow them then to do so with billions in subsidies." Swiss airline spokesman Patrick Jeandrain insisted the government money was an investment, not a subsidy. "They became shareholders and will want to see benefits," he said. "We're not worried." Rather than targeting Switzerland, he insisted the EU's main targets were U.S. carriers and their "very aggressive pricing policies." In recent months, EU airlines have complained that U.S. carriers used Washington's $15 billion rescue package to slash prices on trans-Atlantic routes. Playing down suggestions that the measures represent another volley in a trans-Atlantic trade war, EU officials said the regulations have been under consideration for months -- long before the Bush administration's decision last week to levy punitive tariffs on steel. In recent years, the EU has cracked down on airline subsidies, although some exceptions are allowed for last-chance, never-again rescue plans or extraordinary events like Sept. 11. Just Tuesday, the commission approved London's $57 million plan to compensate British airlines for the four days U.S. airspace was closed following the attacks on the World Trade Center and the Pentagon. A similar package had been authorized for French carriers. Yet Brussels cut off Belgium's Sabena airline last year, leading to its collapse, and just opened an investigation into Greece's Olympic Airways. "Our airlines have to 'play it by the book' whether or not they are undergoing a crisis such as the one bolstered by the events in September 2001" said Transport Commissioner Loyola de Palacio. U.S. airlines see the effort as hypocritical, saying European airlines received aid for decades. "The EU only has to look at itself over the past few years to see what it has approved and realize that it hasn't always enforced fair pricing," said Joe Le Pochat, managing director of EU affairs for AMR Corp.'s American Airlines. Trade Commissioner Pascal Lamy added that the proposal was designed to fill a gap created because World Trade Organization rules currently cover only trade in goods, not air transport. Other countries, including the United States, have introduced their own measures in recent years to respond to anticompetitive practices by foreign airlines, he noted. The proposal now will be submitted for approval by governments of the 15-nation bloc and the European Parliament, a process likely to take several months. =20 ---------------------------------------------------------------------- Copyright 2002 AP