EU urged to rethink plan to bail out airlines

March 19th, 2020

Over 150 environmental organisations have urged the EU not to bail out the aviation industry in the wake of the COVID-19 pandemic.  

In a letter to the bloc’s transport ministers, the Stay Grounded network asked that public funding be directed to “people, not airlines” as ministers held an extraordinary meeting this week to grapple with the financial losses airlines have experienced in the wake of the outbreak. 

“Let’s not bail out shareholders and executives who have spent years lining their pockets, while hundreds of thousands of small businesses, owner-operated restaurants and creative artists go out of business,” the letter said. 

Crisis, the network added, requires solidarity and an opportunity to “wash our hands of the virus, not of responsibility”. 

Stay Grounded has repeatedly called for lower-carbon travel alternatives to aviation, such as night train services, and in their letter stressed that those working in the industry were entitled to a just transition to climate-friendly occupations. 

The “unintended pause” for the industry provides a chance, the authors said, “to rethink what we can do to stop far worse consequences from climate collapse, and flying’s contribution to it”. 

DublinAirport FIE
Dublin Airport Terminal 1 & 2 Photo: Colm De Spáinn

COVID-19’s impact on flying 

With travel bans imposed around the world in an effort to contain the virus, the aviation industry has seen a sharp drop in demand for its services, with airlines reducing flights and staff.

Commercial airline traffic halved last week and is expected to continue to plummet as borders continue to close. Qantas Airways Ltd CEO Alan Joyce said it was the “single biggest shock” that the industry has experienced.

Ryanair will cut its flights by 80 per cent over the next week and from 24 March onwards the airline is anticipating that most, if not all, Ryanair Group flights will be grounded. 

On the stock market front, Airbus shares had fallen by more than seven per cent and Boeing saw its value drop by almost a quarter at the beginning of the week. 

Ryanair plane Photo: Pxhere
Ryanair plane Photo: Pxhere

Conditional bail-outs 

While acknowledging the financial hits the industry is taking, aviation manager at Transport and Environment Andrew Murphy stressed that any bailout should be “conditional on carriers paying fuel, ticket and other taxes once the crisis has passed”. 

“Public money should support the technologies of the future and not reinforce the mistakes of the past,” Mr Murphy said.  The environmental NGO is also calling on low-carbon fuel usage being a requirement for any bail-out that is brought forward. 

Aviation accounts for roughly 13 per cent of total greenhouse gas emissions in the EU and if the industry continues to grow as projected, the figure could almost double. 

Yet the industry has been largely exempt from taxation, as it is not required to pay tax on fuel nor international flights in Europe.  To date, the fuel exemption alone is valued at €27 billion a year. 

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