Why, at a time of a global health crisis, would the aviation industry be near the front of the queue for a government bailout? Particularly in the week after Easyjet distributed £174m to shareholders from its profits, including £60m to EasyJet founder Stelios himself – while asking staff to take unpaid leave?
Well, there’s a number of reasons. Several airlines have been struggling financially, as shown by FlyBe’s problems earlier in the year, or have prioritised paying dividends to shareholders over putting money aside to cover emergencies. Norwegian Airlines and Alitalia, who’ve just been bailed out by their governments, were in need of emergency assistance before Covid-19, and doubly so now.
But those are not the only reasons.
Airline companies have always had strong links to the government, with a very strong industry lobby. Together with international agreements governing flying, this has enabled airlines and airports to avoid taxes (fuel tax and VAT, for example) and get state support.
For once, the industry’s requests for special treatment might not be going down as smoothly as normal. The Chancellor wrote to the airlines last week to say he won’t be rushed into a bailout, and they should look for financial support from their shareholders first.
But there is a very high chance that the companies’ bosses and shareholders will refuse to budge, and the UK government will come under increasing pressure as other countries bail out their airlines.
All of these circumstances are a major threat to the job security of many airline and airport workers, and steps need to be taken to ensure they are properly supported and not left in the lurch.
So that’s why Greenpeace together with 25 other groups have written to the Chancellor to ask him to only provide bailouts designed to protect workers, the public, the wider economy, and the planet, not shareholders and the airlines’ or airports’ owners.
Bailouts must support a just recovery
Right now people are doing everything they can to protect each other and support our valiant NHS on the frontline of the Covid-19 health crisis. But as we look to the future, it’s clear that the climate and nature emergencies will still remain and the world will need a massive green transformation of infrastructure to help reduce our emissions over the coming years.
We know that the airline sector’s carbon emissions have been increasing globally, and airports are a major contributor to local air and noise pollution, risking public health. That’s why any bailouts that are granted to airlines simply have to address these challenges together, and avoid making them worse.
Any support packages for airline companies must set conditions in a number of key areas:
- protect workers so there are no pay cuts or lay-offs due to the Covid-19 crisis.
- protect the climate – the airlines need to start cutting their emissions to meet the globally agreed climate targets, without relying on offsets (which are unreliable)
- protect public money by giving the government a stake in any companies it supports, so it can set the industry on a more sustainable path. Airlines also need to finally pay their fair share in taxes.
One part of the solution for the aviation sector’s climate problem would be to introduce a Frequent Flier Levy. This would help reduce demand by shifting the tax burden to frequent leisure fliers, without removing access to flights from those with limited alternatives, limited resources, or only travel once in a while.
As well as measures to decrease demand for flights in the future, the government must also lay the groundwork to reduce the emissions of our transport. This could start with investing in rail and bus networks nationally and internationally, as well as powering those networks with renewables.
[If you’d like to see the open letter in full please scroll down to the bottom of the page]
Government needs to protect people and planet
All of our lives have suddenly changed, and the government must show solidarity with impacted workers. Before bailouts are handed out, our government must ask itself if the money will protect people and support positive change for climate and nature. That means using public funding to support people and the environment upon which they depend.