EU flags concern over Austrian minimum airfare plan

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BRUSSELS, Feb 3 (Reuters) – The EU has raised concerns over Austrian plans to set a minimum airfare, a spokesman said, weighing in on an environmental policy debate that pits traditional airlines against low-cost carriers.

A minister from Austria’s Greens, the junior partner in the governing coalition, announced plans last June for a 40-euro ($48) minimum fare that explicitly targeted no-frills operators.

The European Commission “expects to receive more detailed information from the Austrian authorities on the precise content of the envisaged measures,” the spokesman for the EU executive told Reuters on Wednesday.

The Austrian environment and transport ministry did not immediately respond to a request for comment.

Faced with pressure for higher airline taxes to curb greenhouse gas emissions, flag carriers like Lufthansa and Air France-KLM have argued instead for minimum fares that could all but abolish much of the low-cost market.

Austria unveiled its proposal after granting 600 million euros ($721.5 million) in aid to Lufthansa-owned Austrian Airlines.

But a “pricing freedom” provision within the European Union’s main 2008 air services regulation states that airlines “shall freely set air fares” for flights within the bloc.

“The Commission supports measures to promote the greening of aviation, and of transport in general, which are compatible with the internal market rules,” the EU spokesman said.

“As always, the Commission will verify whether the new measures are in line with EU common rules and, if necessary, will engage a dialogue with the Austrian authorities.” ($1 = 0.8318 euro) (Reporting by Laurence Frost in Paris and Marine Strauss in Brussels; Additional reporting by Francois Murphy in Vienna Editing by Matthew Lewis)

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