Millions in taxpayers’ money flow to airlines with no environmental conditions attached

April 21, 2020

European airlines have begun receiving hundreds of millions of euro in taxpayer-funded bailouts with no obligations to reign in their environmental impact. T&E, Greenpeace and Carbon Market Watch are following the financial aid through their airlines bailout tracker.

The financial aid comes as a former EU climate commissioner has supported T&E’s call that any state help for airlines during the Covid-19 crisis must be conditional on those airlines cleaning up their act when restrictions are lifted. So far, only Austria has indicated that airlines would have to agree to environmental criteria to receive support.

TUI, the world’s biggest tour operator, is to receive €1.8 billion in loans from the German state, while EasyJet has already received a £600 million emergency loan from the UK government. The Finnish state is to provide a guarantee of up to €600 million to flag-carrier Finnair, and the Norwegian government has given a loan guarantee to Norwegian Air (€262 million). Denmark has loaned SAS €137 million.

Airlines are also being given more time to pay their bills: the payment of up to €1.1 billion in air traffic control fees due in the coming months has been deferred. The decision was taken by Eurocontrol, an international organisation governed by European states. In Belgium two airports, Charleroi and Liege, have been allowed to defer millions of euro in charges owed to the regional government.

Last month T&E issued a statementsaying it supports state aid to protect jobs, but only on condition that the airlines pay tax and take up green technology once conditions improve. That position was supported by Miguel Arias Cañete, the EU climate commissioner from 2014 to 2019 who was the principal commissioner representing the EU at the Paris climate conference of December 2015.

Cañete told the Guardian that any state aid ‘must be conditional, otherwise when we recover we will see the same or higher levels of carbon dioxide’ from flying. ‘We know the level of emissions we have to commit to [under the Paris accord]. They [airlines] are worried about survival and will need lots of support, lots of liquidity – that gives them a big responsibility.’

In Austria, Minister for Environment Leonore Gewessler told reporters last week that any public money to support Austria Airlines should be used to help hit the sector’s climate targets.

T&E’s aviation manager, Andrew Murphy, said: ‘Airlines calling for public support in bad times should accept they need to start paying taxes in good times. Most airlines grew their emissions right up until this crisis. To avoid further growth after the current drop, governments must stand by the European Green Deal commitment to rein in emissions growth. That means making airline bailouts conditional on carriers paying fuel, ticket and other taxes once the crisis has passed, and requiring airlines to start using low-carbon fuels once conditions improve.’

The UK has indicated it only wants to help the aviation industry as ‘a last resort’. Despite large-scale public spending to help businesses and individuals survive the Covid-19 crisis, the British finance minister Rishi Sunak said he would only help airlines once they had ‘exhausted other options’ for finding emergency finance. However, it later emerged the British government had given EasyJet a €675 million loan; the airline is also borrowing €460 million from commercial creditors.

Meanwhile, almost 70,000 people have signed a petition opposing bailing out the aviation industry unless it leads to better labour conditions and a cut in emissions. The #SavePeopleNotPlanes petition is backed by 250 trades unions and environment groups brought together by the Stay Grounded campaign group. Its spokesperson Magdalena Heuwieser said: ‘For decades the aviation industry has avoided contributing meaningfully to global climate goals and resisted the merest suggestion of taxes on fuel or tickets.

‘Now, airlines, airports and manufacturers are demanding huge and unconditional taxpayer-backed bailouts. We cannot let the aviation industry get away with privatising profits in the good times, and expect the public to pay for its losses in the bad times.’

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