A Portuguese regional airport that was expanded with large amounts of EU funding has announced plans to turn itself into an aircraft parking facility because demand for the airport has fallen badly short of predictions. The case highlights T&E’s call for greater scrutiny of public money being used to prop up carbon-intensive, underutilised infrastructure with questionable social and economic benefits.
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.
On 3 July, the Commission released draft new guidelines on State aid to the aviation industry. Citizens have until 25 September to comment. T&E estimate that about €3bn a year goes to the aviation industry across the EU and the Airports Council International (ACI) have estimated that airports under-recover about €4bn in airport costs 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.
The EU should not be funding airport projects, or dressing up airport express train links as green "intermodal hubs" says T&E's deputy director Nina Renshaw.
The NGO network CEE Bankwatch says the European Bank for Reconstruction and Development urgently needs to reduce its carbon-heavy investments in new motorways and air travel, and instead promote transport that assists the transition to a low-carbon economy. Its comments come in a consultation by the Bank on how it decides its transport lending in central and eastern Europe. Bankwatch also says the Bank’s ‘private sector at just about all costs’ approach is leading to bad lending decisions, and it should ensure that railway restructuring does not become a misleading term that takes trade off the rails because of higher costs.