European wet-leasing deal hailed a ‘win win’ in EU-US dispute
European pilots have welcomed the changes to the rules on wet-leasing arrangements between EU airlines and 3rd country carriers agreed upon by the European Union (EU) on October 18, 2018.
The revised rules (outlined in article 13 of EU Reg. 1008/2008) will allow the European Union (EU) to lift the existing time restriction on wet-leasing – a practice of leasing an aircraft with crew – and also “solve a dispute between the EU and the U.S.”
At the same time, the amendment will prevent the ever-increasing creative airline set-ups in the EU that include wet-leasing such as empty shell companies, owning only one or two aircraft, while all others are wet-leased from third countries.
Without this amendment the effect on both EU quality employment and safety standards would have been potentially devastating, an official press release from the European Cockpit Association (ECA) reads.
“The [European Union’s] Commission’s original proposal had the potential to ‘convert’ third country wet-lease into a regular – and highly problematic – feature of European airlines’ business models. The risk has now been averted,” said ECA President Dirk Polloczek. According to him, the changes to the rules will prevent the steady replacement of European production and quality aircrew jobs by third country aircraft and crew.
Throughout the revision process, ECA had cautioned against introducing unlimited and unrestricted wet-leasing, without sufficient guarantees that it will not be abused. But under the new agreement, the more flexible wet-lease provisions would only by applicable to third countries that have a sufficiently mature aviation relationship with the EU.
Notably those that have an Air Transport Agreement with the EU in place since 2008 – such as the U.S. – would qualify for this wet-leasing opportunity.
The EU Ministers backed this change and strengthened further the text by adding the principle of reciprocity. A new recital now mentions ‘Reciprocal rights and obligations’ for the parties, i.e. the EU and the 3rd country. This requirement is particularly important.
Some countries have national legislation in place that protect their domestic markets and jobs and would make it potentially impossible for EU airlines to benefit from unlimited wet-leasing opportunities in those markets, even if an Agreement would allow to.
“The bottom line is the EU Ministers and Parliament made a wise decision. The Trilogue agreement on the new Article 13 will allow the EU and U.S. to resolve their outstanding issues and to wet-lease aircraft from each other. At the same time, the EU market growth and crew employment will not be exported abroad. It is a win-win,” Polloczek concluded.
The European Cockpit Association (ECA) is the representative body of European pilots at European Union (EU) level.