After Boeing ruling, aviation needs to go cold-turkey from subsidy addiction, says NGO
Today’s ruling by the WTO against Washington State on subsidies to Boeing, and an earlier similar ruling on Airbus, officially adds another €5.4 billion ($5.7 billion) to the already very long list of subsidies granted to the aviation sector, sustainable transport group Transport & Environment has said.
That list of direct and indirect subsidies includes:
Airlines enjoy universal exemption from fuel taxation, estimated at €20 billion a year in Europe and over €60 billion globally;
Airlines receive an effective subsidy worth another €7 billion in Europe alone because ticket prices are artificially suppressed by about 20% due to the VAT exemption on ticket sales;
Airlines are bailed out on a regular basis especially since the 2009 crisis;
Already lenient state aid rules for airports have been regularly flouted; worth another estimated €3 billion a year in Europe alone;
Manufacturers receive a €1.8 billion subsidy under the ‘Clean Sky 2’ joint technology initiative;
Air traffic control receives a €3 billion subsidy under the SESAR ‘joint undertaking’.
Earlier this year the International Civil Aviation Organisation agreed a so-called ‘global market-based measure’ in a bid to address the runaway CO2 emissions of aviation, the most climate-intensive of transport modes. One reason CO2 emissions are out of control is that flying is artificially cheap because of such subsidies.
Meaningful action is urgently needed at global level but the very modest and inadequate plans agreed at ICAO will mean nothing so long as the sector binges on government handouts. The subsidies above fall outside of WTO rules and will only be removed with action by governments.
Bill Hemmings, director of aviation at T&E, said: “Today’s ruling is a wakeup call to anyone who believes that the global market-based measure will solve aviation’s climate problem. Flying is the cheapest and quickest way to fry the planet because not only manufacturers, but also airlines and airports, are subsidised to the hilt.”