Press conference of A4E airline CEOs at A4E Aviation Summit in Brussels

Fri 10 Feb 2017 – European airline leaders welcomed last week’s proposal from the European Commission to continue with the ‘stop the clock’ scope of the EU Emissions Trading System (EU ETS) until 2020 and urged EU legislators to apply the required new regulations as soon as possible. Speaking at the inaugural Airlines for Europe (A4E) Aviation Summit in Brussels on Wednesday, Lufthansa CEO Carsten Spohr said A4E members expected the ICAO CORSIA carbon offsetting scheme to replace the EU ETS from 2021 and called for a smooth transition between the two. However, German Green MEP Michael Cramer said during a panel session at the conference that it was likely the European Parliament would vote to continue with the EU ETS alongside CORSIA, raising the prospect of European airlines having to comply with two carbon schemes. Meanwhile, the Pope has described the buying of carbon offsets to compensate for air travel as hypocritical.

Having completed its first year, A4E now has 14 members that include Europe’s biggest legacy and low-cost carriers: Lufthansa, Air France-KLM, easyJet, Ryanair and airline group IAG. Two other European airline associations, AEA and ELFAA, have since fallen by the wayside, leaving A4E as a formidable lobbying force on policy issues that the major airline rivals can agree on, such as airline taxes, airport charges and ATC strikes. The environment is another area of consensus that A4E says it will focus efforts.

“When you get people round the table where there are issues of common interest like the environment, it’s amazing what can be done,” said Willie Walsh, CEO of International Airlines Group (IAG), which operates British Airways, Iberia and Aer Lingus.

Added Carolyn McCall, CEO of easyJet: “The environment is an issue we airlines don’t talk enough about. We are all taking on new aircraft and with new planes like the Airbus A320neo and the Boeing equivalent, we are going to save around 14% on fuel and over 50% on noise. That’s huge. There’s a very big drive to replace older planes. It’s very important to the image of the industry.”

With regard to the EU ETS, A4E Managing Director Thomas Reynaert said: “The European Commission has taken fully on board our suggestions so we are very happy with their proposal. We will be watching to see how the implementation of the ICAO scheme will work from 2021, but this is a good first step in the process.”

Lufthansa’s Carsten Spohr told journalists at a pre-Summit press conference how difficult it had been to get an agreement on a global market-based measure for aviation. “It was a great achievement by ICAO and IATA to have this outcome,” he said. “This has paved the way for a fresh look at the EU system from 2017 and beyond.

“It is important for EU legislators to ensure the competitiveness of European carriers and avoid any adverse financial implications. We urgently need clarity on the requirement for 2017 emissions and beyond.

“We also call on the European Council and the Parliament to conclude the necessary legislative process well ahead of the reporting deadline in spring 2018. The expectations of A4E are that CORSIA will replace the ETS as of 2021. European operators cannot, and shall not, be burdened and regulated twice.

“We want to encourage more countries to join the first phase of CORSIA in order to exceed the 80% coverage of global aviation so far volunteered. The global scheme will complement our joint industry efforts to develop cleaner aircraft, switch to low-carbon fuels and to operate aircraft more fuel and noise efficiently. When the industry is healthy, it is able to invest and contribute towards a greener planet, way beyond what legislators force us to do.”

One such legislator, Michael Cramer MEP, said the agreement reached at ICAO was not to reduce emissions but merely to halt an increase.

“The agreement is a small step but nevertheless a step in the right direction,” he told Summit delegates. “However, we are not clear about the next steps at ICAO and more pressure is still needed, therefore continuing with ‘stop the clock’ is still required. Aviation must participate in the reduction, not just stopping the increase, of emissions.”

When faced with international opposition in 2012 to the inclusion of emissions from all flights to and from Europe under the full scope of the EU ETS Directive, he said the EU had not been strong enough. “The clock was stopped because there was a threat, which I don’t believe was a real one, and so the EU was weak.”

He welcomed the fuel efficiency progress being achieved by the aviation industry that had resulted in a 1.5% per year improvement but passenger numbers were increasing by 5%. “That is a problem and therefore we must do more.”

Cramer said other industries were having to make reductions and it had to be fair that all sectors contributed. Asked whether he expected the Parliament to vote for ‘stop the clock’ to continue after 2020, he responded: “Of course.”

Co-panellist Finnair CEO Pekka Vauramo, responded that having two schemes in operation would penalise European airlines. “It would be a pity if it happens,” he said. “It would be very difficult for us to compete.”

Cramer said airlines had agreed to the EU ETS in the beginning as an alternative to taxes on kerosene and tickets. “European airlines have escaped having to pay billions of euros in taxes – this is absolutely unfair,” he said. “The railways, which are a more environmentally-friendly form of transport, have to pay more under the EU ETS than airlines.

“We have a situation in Germany where there are 3,000 flights per year between Stuttgart and Frankfurt although the train only takes one-and-a-half hours. How is this possible? It’s because airlines get millions in subsidies.”

He added that many international airports in Germany had financial deficits that were being subsidised by the taxpayer. “Sometimes there is a justification for subsidies, such as links to outlying islands,” he said, “but they must be for the right reason.”

By contrast, one of A4E’s main campaign strategies is to rid the sector of what it sees as unreasonable taxes imposed by a number of EU countries, arguing that removing such taxes – as proven in some countries that had done so, it contends – would boost economic growth, tourism and job creation. European airline passengers had paid €5.6 billion ($5.9bn) in taxes to a number of EU States last year, reported IAG’s Walsh. “We believe the European Commission could, and should, intervene on behalf of European consumers,” he said.

“The focus must be on concrete and measurable actions that support European airlines and their customers by providing more flights and lower fares,” says the A4E website. “By removing aviation taxes, governments would end up net beneficiaries due to the increased take from VAT and other taxes that would go a long way to covering the loss of aviation tax revenue.”

Meanwhile, at the Vatican, Pope Francis has told an audience of 1,000 social economy entrepreneurs from around the world that paying compensation for air travel carbon emissions was hypocrisy. “Planes pollute the atmosphere but with a fraction of the ticket price, trees are planted to compensate for the damage inflicted,” German newspaper Süddeutsche Zeitung reported. “If this logic was to be applied, one day it would get to a point when armament companies set up hospitals for those children who fell victim to their bombs.”

Major European airline CEOs came together for the first A4E Aviation Summit in Brussels:

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