Press Release

Support airlines in crisis, but on condition they start paying tax and take up green technology – T&E

March 18, 2020

EU transport ministers discussing Covid-related financial aid to airlines must make bailouts in these hard times conditional on carriers starting to pay tax once conditions improve and taking up green technology, sustainable transport group Transport & Environment (T&E) has said. The ministers discussed measures to shore up the aviation sector in an emergency meeting via video conference today.

The aviation industry employs tens of thousands of people across the EU, and financial support must be prioritised for the paychecks of workers whose jobs are in danger, T&E said.

But state aid to airlines should only be approved if countries ensure they will later start to pay tax and contribute to severely strained public coffers. Carriers have long been exempt from fuel taxation and VAT on international flights in Europe. Their jet fuel tax exemption is valued at €27 billion a year. They have also been slow to use cleaner fuels such as synthetic kerosene and waste-based biofuels.

Andrew Murphy, aviation manager at T&E, said: “Airlines calling for public support in bad times should accept they need to start paying taxes in good times. EU governments should make airline bailouts conditional on carriers paying fuel, ticket and other taxes once the crisis has passed. They should also require airlines to start using low-carbon fuels once conditions improve. Public money should support the technologies of the future and not reinforce the mistakes of the past.”