Airline chiefs slam European countries over green taxes and overdue reform of inefficient airspace
Fri 6 Mar 2020 – Chief executives from Europe’s biggest airlines called for urgent reform and modernisation of European airspace that they said could eliminate around 25 million tonnes of CO2 a year and save €17.4 billion ($19.4bn) in fuel and related socio-economic costs. IAG’s Willie Walsh said it was “scandalous” that after many decades, the Single European Sky still had not been implemented. Speaking at the Airlines for Europe (A4E) Annual Summit this week, the CEOs also criticised attempts to tax passengers and fuel on environmental grounds, saying none of the revenues were used to help the industry decarbonise. Instead, the EU should ensure the full implementation of the global CORSIA carbon offsetting scheme and pursue a long-term carbon goal at ICAO. They also urged EU States to take legislative action and policy decisions to boost the development and uptake of sustainable aviation fuels.
Air France-KLM CEO Benjamin Smith, who has been elected as A4E’s Chairman for 2020, said airlines were united to make the new European Green Deal a success.
“We see this as part of our commitment to European society,” said Smith. “We look forward to working closely with industry and policy makers to make the continent’s skies the most efficient and environmentally friendly in the world – because failing is not an option.”
Coinciding with the European Commission’s announcement of a proposal for a European Climate Law that commits EU States to climate neutrality by 2050, A4E said it was leading a cross-sector study with the European Regions Airline Association, airports, manufacturers and air navigation service providers on potential pathways towards a net-zero or low-carbon air transport of the future. The outcome is expected in May, said A4E Managing Director Thomas Reynaert.
However, the challenge of tackling climate change was considerable, said Walsh, who retires from IAG in the summer. “Airlines are doing their share but in some areas, like air traffic management, we need action from other parts of the industry and EU leaders in order to succeed,” he said. “The modernisation of European airspace is both urgent and long overdue. This responsibility now lies with the Croatian and German Presidencies of the EU Council. The creation of a Single European Sky has been debated for 20 years – we cannot afford to wait any longer.”
Walsh told a press conference at the Summit that commercial aircraft were still flying the same inefficient routes as was the case 40 years ago, despite airlines “investing billions” in new technology that allowed aircraft to fly from point A to B without requiring land-based navigation. European airlines flying within European airspace emitted around 67 million tonnes of CO2 last year, he said, but with the modernisation of air traffic these airlines could save up to 7 million tonnes.
“It has been estimated we could reduce CO2 emissions by 10% through the Single European Sky – that’s a massive saving,” he said. “It’s not for the want of trying by us airlines – it’s that we’re not seeing other areas respond. ANSPs and governments need to address this, stop talking about doing it and take action.”
Lufthansa CEO Carsten Spohr believes the German presidency of the EU Council could make the issue a priority. Passenger convenience in less travel times and money savings used to be the main arguments in favour of reform but now there was “a new argument in town” in the form of carbon savings, he said.
In a panel session, the European Commission’s Director-General for transport, Henrik Holohei, said the lack of progress by EU countries on the Single European Sky was “disgraceful”, blaming sovereignty issues and a lack of cooperation between air navigation service providers. “In the EU we have managed to eliminate borders on the ground but not in the sky,” he said, adding, “It’s time for action.”
Another area for environmental improvement was in synthetic and sustainable aviation fuels, said Spohr. “This is surely the most realistic and effective means to seriously reduce emissions from aviation in the next decades. They have the mid and long term potential to reduce emissions by 85-90%.
“However, volumes of these fuels are way, way too small. As example, if my airline had access to all the SAF available in the world, it would only last 36 hours. So we have major issues around availability and the cost, which is around four to five times more than fossil fuel currently. In a highly competitive industry like ours, none of us can afford the extra cost. It is also important that in order to ensure a level playing field, our regulators don’t push us into [mandated] fuels unless it is done worldwide, otherwise it decreases the competitiveness of European airlines.”
Spohr said Lufthansa had a carbon compensation scheme in which passengers could buy SAF, which in turn allowed the airline to buy SAF volumes in San Francisco but he admitted take-up had been limited.
“So we need to bring the cost of SAF significantly down and bring the availability up,” he said. “We believe this is a huge opportunity for EU policy makers to play a leading role in the future of decarbonising our sector. A4E calls upon the European Commission to make SAF production a policy priority and national policies should support this. Research and development should be incentivised to ensure billions of litres of these fuels become available. Financing circles should also be created so, for example, money taken in aviation taxes could be used to support SAF investment.”
On taxation, Ryanair’s Michael O’Leary said: “We would like to see the removal of rights of EU governments to use aviation as a tax grab against consumers. In the last year, €16.7 billion ($18.6bn) of unilateral aviation taxes are being scammed from both the airlines and our customers under the guise of environmental taxes. None of this money is being spent on the environment and we need the Commission to push back on this. Taxation has done nothing for Europe’s passengers in the past 25 years.”
EasyJet CEO Johan Lundgren said his airline had paid €650 million ($720m) in taxes apart from EU ETS costs last year. “None of them goes into what we are trying to do, which is to decarbonise. The taxes don’t incentivise efficient flying. We’re not afraid of taxes but what we want is to ensure those taxes are linked to how efficient we are operating, not to get people to fly less.”
Walsh said last year IAG had paid €967 million ($1.1bn) in UK Air Passenger Duty, which had been introduced as an environmental tax. “Not one single cent went into environmental research or support,” he said. “The idea that we add more taxes is just damaging to the industry because it’s reducing our ability to invest in new technology, sustainable biofuels and research and development. It’s a nonsense.”
European airlines, argued Spohr, were already disadvantaged by the EU ETS which, he said, increased costs for feeder flights to their hubs compared to feeder flights to hubs outside Europe where the EU ETS did not apply.
Meanwhile, at a meeting yesterday of the EU’s Environment Council, Poland presented its views on the ending of free allowances for airlines under the EU ETS. The proposal is reported have received only minority support from other EU Member States although the Commission said it “welcomed the initiative as timely and recalled that a gradual reduction of free allowances for airlines was envisaged as part of the revision of the ETS directive, currently planned for June 2021.”
Airlines for Europe Annual Summit (starts at 32:40):