Out of all means of transport, the aeroplane is the biggest polluter, by a long chalk. It is the source of greenhouse gas emissions that has seen the steepest growth curve in Europe over the last few decades. Consumers are starting to wake up to this fact, as concern over the speed at which the planet is warming up spreads; the youth marches of 2019 and the international platform granted to Greta Thunberg are testament to this. Long before the COVID-19 pandemic, the Scandinavian countries, in which awareness of the problem is greatest, saw a drop in air travel. The citizens’ movement ‘Fly Less’, which is backed by climatologists and other key figures, is gathering more and more followers.
Before the public health crisis, there were more than 4 billion passengers internationally every year and the IATA was hoping to double this number by around 2037. The aeronautical sector was in good shape in Europe, with only a handful of airlines really struggling (Alitalia permanently in the black, upcoming restructuring of Brussels Airlines, to give two examples). The explosion of low-cost flights opened up access to air travel to less wealthy social categories and were able to out-compete the train and the ferry. This economic success was made easier by the absence of ecological constraints: civil aviation is not covered by the Paris Climate Agreement.
At global level, the consequences of the pandemic translate into losses of more than $100 billion and around 25 million jobs. The fallout of this for the European aviation industry is evident, with flight numbers collapsing by 90% and mass redundancies being made: 12,000 at British Airways, 3,000 at Ryanair. All of a sudden, airlines are negotiating restructuring plans and many of them are calling for public aid, in various forms. As the European Commission has relaxed the competition rules until the end of 2020, the numbers of State aid measures being notified and approved or pending are multiplying.
So far, 11 member states have notified the Commission of one or more national aid measures: Sweden, Denmark, Germany, Finland, Hungary, Austria, Belgium, Spain, France, the Netherlands and Italy. Six of them have already been given the green light: 318 million euros for Sweden (all airlines operating in the country), 407 million jointly for Sweden, Denmark and Norway (for SAS), 2.35 billion for Germany (TUI and Condor), 1.1 billion for Spain (Iberia and Vueling), 7 billion for France (Air France). For Italy, the decision is awaiting its parliament’s vote: 3 billion has been requested for Alitalia, which was nationalised in April. Still under discussion are the aid regimes proposed by Belgium (300 million for Brussels Airlines), Finland (600 million approved and a further 700 under discussion for Finnair), Hungary (344 million for Wizz Air), the Netherlands (2 billion for KLM), Austria (767 million for Austrian Airlines) and another one by Germany (9 billion for Lufthansa). The German State has just decided to buy 20% of the share capital of the latter. The Belgian and Austrian airlines are members of the Lufthansa group. If all the aid measures are approved, the Lufthansa group will get more than 10 billion in total and the Air France-KLM group will get 11.
The total of the aid already approved for countries of the EU stands at 11.775 billion. If all the aid is authorised, including the United Kingdom, Switzerland and Norway, the figure ends up in the neighbourhood of 30 billion. That needs talking about.
The Spanish government has already voiced its concerns that aid on that level will distort competition (see EUROPE 12485/24). Ryanair, which has not applied for anything, is reserving the right to take legal action against the measures. Various economists have openly questioned whether this is a good use of public money: national pride would struggle with the idea of seeing its flag disappear from the tail of an aeroplane. Whereas the European Green Deal is the new Commission’s emblem for its entire legislative period, with the blessing of the European Parliament, some people are questioning whether this aid is consistent with this major project. Obviously, it is about saving thousands of jobs and as far as the governments are concerned, this is a greater priority than climate objectives. The aid measures notified are unconditional, with the exception of a handful of commitments not to distribute dividends and bonuses and, in the case of Air France alone, efforts in favour of the climate been announced. In other words, in all of these bailouts, the airlines have not so far been held to any new legal requirement to contribute to the energy transition and European decarbonisation targets.
For the remainder, although research and experiments are being carried out to produce aircraft powered by batteries and solar energy, although some of the later models are far more fuel-efficient than earlier versions, a clean aeroplane that is capable of travelling long distances carrying a sufficient number of passengers is still some way off: probably a good 15 years. Once the crisis is over, the industrial and commercial logic will continue to focus on growth: more aeroplanes, more flights, more passengers.
In the short and medium terms, public aid will not be enough to get the sector back off the ground: the major challenge will be winning over enough keen travellers. The 2020 tourist season will obviously be a very poor one, but even beyond it, there are no guarantees.
Consumers are well aware of the uncertainty over refunds on cancelled flights. A fair application of the law – guarantees of swift reimbursements – might have been enough to reassure them. But the current quibbling (see EUROPE 12483/5 and 12490/7), with airlines trying to legitimise the alternative of issuing vouchers for future flights, is a short-sighted tactic and does a disservice to the sector itself. It will cause consumer confidence to fall twofold: consumers will not only mistrust the European legislative framework (and therefore the EU itself), but also their travel agents and airlines.
But there is one even more important element: the safety aspect. Getting on board an aeroplane as always involved a risk, even a statistically very low one such as that of crashing, or at least that of agonising turbulence or a forced landing before the destination. These days, there is also the risk of contamination, in airports and during a flight of several hours in the company of complete strangers, usually from other countries, whose state of health is a complete unknown quantity. (To be continued).
Renaud Denuit