EU approval of Ireland’s €42.5 million in state aid to small regional airports has been criticised for allowing public money to prop up underutilised infrastructure with questionable social and economic benefits. Four airports will receive the grants over the next four years – while the Irish government faces calls to address ‘chronic’ underinvestment in low-carbon public transport.
NGO Transport & Environment (T&E) has criticised the decision by the Irish Government, with Brussels’ backing, to grant €42.5 million to a number of small regional airports, a decision which will see public money propping up underutilised airports with questionable socioeconomic benefits. These public resources could have been better invested in developing a sustainable transport network in Ireland, T&E argues.
Further decarbonisation of transport through a shift to alternative fuels and electro-mobility forms a major part of the European Commission’s strategy for an ‘energy union’, unveiled last week. With transport being responsible for more than 30% of EU energy consumption and a quarter of emissions, the Commission said legislation on ‘decarbonising the transport sector, including an action plan on alternative fuels’ would be put forward in 2017.
In mid April 2014, the European Commission opened a consultation on disputed aid to 23 regional airports in relation to the newly revised state aid guidelines for airports and airlines which came into effect at the beginning of the month. T&E believes that decisions that will be taken on state aid under the new guidelines risk further distorting competition in an already heavily subsidised sector, wasting scarce public resources and expanding billions of euros in climate harmful subsidies that will generate more CO2 than the original emissions trading system intended to save. Transport & Environment believes that state aid can only be justified for select small airports in remote areas for which other transport is not a viable option. You can download our consultation response below.
Last week saw Europe extend its dirtiest subsidy, the one that makes ultra-cheap air tickets possible, by at least another decade. That’s the simplest way to sum up new rules for state aid to regional airports and airlines. The text itself is, as usual, almost impossible to read for lay people, so in this piece I will try to paint the rules and their consequences as simply as possible.
State subsidies for regional airports and airlines serving them – mainly the low-cost airlines – will be allowed to continue for at least another 10 years, according to the Commission’s finalised guidelines on state aid for airports. The revised guidelines, which cannot now be challenged by MEPs, are ostensibly aimed at streamlining and tightening state aid for airports.
Aviation is the most carbon intensive transport mode, yet European member states exempt airlines from fuel tax and airline tickets completely from VAT. Now, with its aviation state aid guidelines, the Commission has decided to open the floodgates and expand operating aid to airports in an effort to boost their turnover.
The European Commission today published its final guidelines on state aid for aviation, which will allow regional airports and the airlines serving them to keep receiving subsidies worth an estimated €2-3 billion a year.
The Commission has published proposals aimed at reducing the amount of taxpayers’ money that goes to airports and airlines. However, the fine print of what is initially a consultation means small airports will continue to receive massive subsidies that often make their way to low-fares airlines, even when such subsidies distort competition between airlines. The consultation is important, because when it is complete the Commission can implement its preferred solution without consulting MEPs.