European Commission opens the floodgates to public aid for airports and low-cost airlines
Brussels, 20 February 2014 – for immediate release
The European Commission today published its final guidelines on state aid for aviation, which will allow regional airports and the airlines serving them to keep receiving subsidies worth an estimated €2-3 billion a year.
The guidelines sanction an increased flow of taxpayers’ money towards regional airports for at least the next decade, and allow infrastructure aid for expanding airport facilities to continue permanently - regrettably including no meaningful checks on duplication of airports within a few hundred kilometres of each other. The guidelines also declare that past operating aid, which up till now has been illegal, will retroactively be made legal.
Transport & Environment (T&E) expresses outrage that the guidelines open the floodgates to increased operating aid for airports.
Bill Hemmings, aviation manager at Transport & Environment, said: "The Commission openly acknowledges that operating aid is the most distortive form of aid. Yet with its new state aid guidelines, it not only legalises past subsidies, but also gives a new blank cheque to airports and airlines that fail to boost local economies. Why must everybody pay so that the better off can fly more often and for cheaper?"
Operating aid is designed to cover the cost of running small airports, such as personnel and maintenance. Instead, operating aid has been used to lower airport fees to attract low-cost carriers, distorting competition and fuelling artificial demand for flying. Giving taxpayer money to airports in the form of operating aid has been illegal in the past, as it is a basic principle of competition law that EU states propping up one industry over another distorts trade. In its rules published today, the Commission legalised this aid and granted an ‘amnesty’ to previous aid, declaring it legal retroactively. The final guidelines are not subject to parliamentary oversight and will be used for the Commission’s legally binding future decisions.
State aid is the primary reason that smaller airports have grown so much faster than larger airports. In the period between 2004 and 2012, airports under 1m passengers grew by 135%, airports under 5m passengers by 79% and airports over 5m passengers by ‘only’ 29%.
“Making operating aid legal is a quick fix by the Commission to make its life easier. Countless regional airports have been abusing subsidies for a decade knowing full well it was illegal. Instead of turning a blind eye to the dirtiest subsidy in the EU, the Commission should have established sound environmental and economic sustainability criteria for recipients of this aid,” Hemmings concluded.
Aviation is the most carbon intensive transport mode, responsible for about 5% of global warming. If aviation were a country it would be ranked 7th in the world for CO2 emissions – between Germany and Korea. Yet Europe already exempts airlines from fuel taxes, and airline tickets from VAT; subsidies worth EUR 40 billion. Now they have been given the green light to expand state aid subsidies, which will promote more highly polluting low-cost flights.
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