Following the Covid-19 pandemic, many airlines are currently applying for, or receiving, state aid. EPF stresses that decisions taken today must be considered in a broader, long-term perspective and assessed against the three pillars of sustainability – economic, social and environment.

In EPF’s view, state aid to airlines must meet a number of conditions:

• it should be temporary and take the form of a loan that must be repaid
• it should be guided by the principles of market efficiency and connectivity, i.e. it should only be used to support air services that are needed to ensure connectivity & cannot be fulfilled by another, more environmentally friendly, mode of transport
• it should come with strict social obligations towards both staff and passengers.

For this reason, EPF addressed a letter to the European Commission, explaining our concerns related to the use of state aids to Lufthansa and other major EU airlines:

• Approval of state aid should be conditional on mitigating the impacts of air travel, for example, by encouraging a shift to more climate-neutral modes
• Approval of state aid should be conditional on respecting air passenger rights, notably the right to cash reimbursement in case of cancellation
• Without remedial measures, state aid to support legacy carriers risks to accentuate market distortions: not only in relation to new entrants and smaller regional carriers, but also in relation to Europe’s transport sector (including coach and especially rail) more widely.

EPF’s Aviation Recovery note, published earlier this month, can be consulted here.