EC consults on aviation subsidies

22nd August, 2013

The European Commission has published proposals intended to reduce the amount of public money that goes to airports and airlines, but in practice, small airports will continue to receive massive subsidies that often make their way to low-fares airlines, Brussels-based NGO T&E (Transport and Environment) reports.

T&E’s comments come in response to a public consultation which runs until 25th September.

T&E estimates that under the proposals, Europe’s airlines would continue to receive around €3 billion a year in direct subsidies. States would continue to disproportionately subsidise smaller regional airports, whose airlines are almost exclusively low-fares carriers. Yet the current system is being abused – airlines are using subsidies to take traffic from their competitors and boost their own profits.

These subsidies received by the aviation industry are complemented by even larger tax exemptions, recently estimated by CE Delft at €30-42 billion every year. The figure for the UK alone is around £10 billion annually.

The main function of subsidies is to encourage people, mainly tourists, to fly to places where they would otherwise choose not to go. While that no doubt benefits some individuals and companies in the vicinity of the airport receiving the subsidy, it is hard to see what net benefit there is to countries, the EU or the taxpayers who fund the subsidy.

AEF’s response response highlights that both tax breaks and subsidies promote more air traffic, generating more noise, air pollution and greenhouse gas emissions. We believe that, other in the most exceptional circumstances, there are no social, economic or environmental justifications for these financial benefits being offered to airports or airlines.

A seminar was held in Brussels which AEF attended. See seminar notes. The main action taken away by delegates was to assemble all the cases they could of subsidies beign given in their country. We shall report on these in due course.