Among a range of ‘green strings’ conditions attached to €7bn government bailout package, it’s actually French trains that stand to benefit as Air France is told to limit domestic flights where train journeys are possible.
Air France bailout package to demand steep emissions cuts
Finance Minister tells French Parliament €7bn support package would require ailing airline to set goal of becoming world’s most environmentally-friendly carrier. According Minister Bruno Le Maire, any bailout package for the Air France business is to be made conditional on limiting competition with rail services. This means that Air France would not be allowed to carry domestic passengers on flights lasting less than 2 h 30 min on routes where there is a clear rail alternative.
France finance minister said €7bn bailout package was “not a blank cheque”
The French government announced late last month that it would offer a €7bn package of state loans and bank loans guaranteed by the state to the ailing airline Air France, as reported by BusinessGreen at the time.
The proposed deal formed part of a €10bn package from the French and Dutch governments to the Air France-KLM group.
Announcing the support on 29 April, France finance minister Bruno Le Maire said the package was "not a blank cheque" and stressed that enhanced sustainability policies would be linked to the €7bn.
Shortly afterwards, Le Maire provided the lower house of parliament’s economics committee with more details on the environmental conditions attached to the loans, confirming the airline would be required to map out a new path to profitability and set itself the goal of becoming the most environmentally friendly carrier in the world.
Specifically, he said the airline would have to halve carbon emissions per passenger and per kilometre against 2005 levels by 2030.
Overall emissions from domestic flights would also have to be halved by 2024, which would effectively require a significant reduction in the number of short haul flights operated by the company.
Moreover, the airline would have to set a target to source 2% of its aviation fuel from sustainable sources by 2025.
"Lastly, investments will have to be directed in the coming years to renewing the fleet of long and medium-range planes to more effectively fight emissions," Le Maire said, in comments reported by Reuters.
How French trains benefit from the airline bailout
A modal shift from plane to train has been made a condition of a state aid package which the government is offering to Air France-KLM.
According to Finance Minister Bruno Le Maire, a €7bn support package for the Air France business is to be made conditional on limiting competition with rail services. This means that Air France would not be allowed to carry domestic passengers on flights lasting less than 2 h 30 min on routes where there is a clear rail alternative.
However, these flights would be permitted to carry passengers making connections at hub airports such as Roissy-Charles-de-Gaulle in Paris, which is served by TGV services from destinations including Lyon, Marseille and Bordeaux via LGV Interconnexion.
Speaking to the economics committee of the Assemblée Nationale on April 29, Le Maire said that Air France would have to become more profitable and more competitive, and set it a target of reducing its CO2 emissions by 50% on 2005 levels by 2030.
‘Where there is a rail alternative, we expect to see a drastic cut in domestic flights, limiting them to feeding transfers at hubs’, he explained.
“If taxpayers are to bail out airlines, there must be a quid pro quo…”
BusinessGreen, the UK’s leading source of information and in-depth analysis for the green economy, were quick to note that the proposed environmental conditions provide a benchmark, as governments across Europe and the world consider how to support airlines that have been forced to the brink of collapse by national lockdowns in response to the coronavirus crisis.
Ministers taking part in the Petersberg Dialogue climate conference earlier this month repeatedly stressed that economic recovery plans should seek to advance climate action.
Meanwhile, a letter last week from a number of MEPs on the European Parliament’s transport committee argued state aid approval should only be granted to support packages that ensure airlines present credible emissions reduction plans, commit to pay tax on fuel, and curb short haul flights where trains offer a viable alternative.
"If taxpayers are to bail out airlines, there must be a quid pro quo – this industry must help secure our future in the face of an unfolding climate emergency," the letter stated.
However, there is also some resistance, both within the industry and some governments, to attaching complex conditions to bailout packages given increasingly stark warnings that some major airlines could collapse within months, putting thousands of jobs at risk.
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