European carriers are facing growing competition from foreign airlines that have often been accused of receiving government subsidies representing an unfair advantage. To address this issue, the European legislator introduced Regulation 868/2004 allowing to unilaterally impose financial burdens on non-EU carriers in an attempt to level the playing field. However, Regulation 868/2004, designed to protect against unfair pricing practices and subsidisation, remains a dead letter. The Act’s replacement legislation was heralded as one of the key components of the recently revitalised EU Aviation Strategy. This paper analyses the draft proposal for the new Regulation, controversies arising over its interpretation and application and finally the underlying concept of unilateral measures.