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Brussels and Berlin reach deal on Lufthansa bailout
Airline to give up lucrative slots at Munich,
Frankfurt airports.
By JOSHUA
POSANER 5/30/20, 9:01 AM CET Updated 5/30/20, 10:13 AM CET
BERLIN —
Lufthansa has agreed to give up take-off and landing slots at its Munich and
Frankfurt hub airports in exchange for EU approval for a €9 billion bailout
from the German government.
The deal
heads off a dispute between Brussels and Berlin over plans to save the
country’s prized airline from the impacts of the economic crisis.
A European
Commission official said Saturday morning that “commitments proposed by Germany
to preserve effective competition” had paved the way for a deal on the mega
bailout — the largest airline rescue announced so far.
Earlier
this week, Lufthansa said it could not immediately approve the proposed
government bailout due to the terms being imposed during preliminary talks with
the Commission. German Chancellor Angela Merkel is said to have pledged a
“tough fight” should EU officials try to water down Lufthansa’s position in the
European aviation market in exchange for allowing the government aid.
In a statement
published Saturday morning, Lufthansa said that “the scope of the conditions
required in the EU Commission’s view has been reduced in comparison with
initial indications.”
Under the
terms of the deal, the airline said it will transfer a limited number of slots
to European competitors, with those slots initially only available to new
entrants at the Frankfurt and Munich airports.
A
Commission spokesperson told POLITICO the deal includes “commitments from
Lufthansa to make available certain slots and assets at Frankfurt and Munich
airports once the airports become congested again, and enable a viable entry or
expansion of activities by other airlines at these airports to the benefit of
consumers and effective competition.”
The EU
executive said it will now “assess Germany’s notification as a matter of
priority.”
Under the
terms of the bailout, the German government will take a 20 percent stake in
Lufthansa and the option to increase that by an additional 5 percent. Berlin
has pledged to sell its stake as soon as the company is back on its feet.
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Authors:
Joshua Posaner
|
Link climate pledges to €26bn airline bailout,
say Europe's greens
Environment groups insist conditions must be attached
to Covid-19 rescue plan for sector
Jennifer
Rankin in Brussels
Thu 30 Apr
2020 11.57 BSTLast modified on Thu 30 Apr 2020 12.31 BST
Air France
has obtained €7bn in loans and loan guarantees from the French government
acording to the airline bailout tracker compiled by Carbon Market Watch,
Greenpeace, and Transport & Environment.
Airlines
are seeking €26bn (£22.7bn) in state aid to deal with the economic fallout from
coronavirus, according to environmental campaigners, who accuse governments of
failing to attach binding climate conditions to negotiations.
Air France,
which has obtained €7bn in loans and loan guarantees from the French
government, and Lufthansa, currently negotiating a €9bn rescue package with
Berlin, top the charts in the airline bailout tracker compiled by Carbon Market
Watch, Greenpeace, and Transport & Environment.
European
governments have formally agreed €11.5bn in financial aid for airlines ,
including a £600m loan from the UK Treasury and Bank of England for EasyJet. A
further €14.6bn is under discussion, including £500m Richard Branson is seeking
from the British government to aid Virgin Atlantic.
The
industry is grappling with a massive fall in demand: air travel is at a near
standstill, with no end in sight, owing to pandemic-related travel
restrictions.
Some
governments are seeking to attach strings to rescue plans. France’s minister
for ecological transition, Élisabeth Borne, insisted Air France was not getting
“a blank cheque”. The government has set “ecological commitments”, she said,
including a 50% reduction in carbon emissions on domestic flights by 2024, as
well as investing in more fuel-efficient planes.
Austria’s
prime minister, Sebastian Kurz, announced his government would not help
Lufthansa’s Austrian Airways operation without getting something in return,
such as securing jobs in his country; while the vice-chancellor, Werner Kogler,
has said he would “assume” a rescue would only happen with green conditions.
Campaigners
claim none of the green strings agreed so far are binding, also pointing out
that France has not set conditions on Air France’s non-domestic flights, which
account for the majority of its emissions. “France’s green requests are a first
but we had non-binding commitments for years and airline pollution ballooned,”
said Andrew Murphy at Transport & Environment. “Marginally more efficient
planes won’t put a dent in emissions if airlines still burn fossil fuels that
they buy tax-free.”
The data
emerged after a majority of European Union members called for a relaxation of
air-passenger rights. At a virtual meeting of EU transport ministers on
Wednesday evening, Germany, Spain and Romania added their voices to a statement
signed by a dozen countries earlier in the day calling for an urgent change to
EU rules, so airlines can reimburse cancelled tickets with vouchers, rather
than cash.
The member
states argued that the requirement of the 2004 EU regulation to reimburse
cancelled flights in cash is adding to airlines’ cash-flow problems.
The
European commissioner for transport, Adina Vălean, however, has previously said
airlines can only offer vouchers if passengers accept them. Meanwhile, other
member states voiced opposition to the plan, arguing it would “frustrate the
legitimate expectations of passengers” according to a statement released after
the meeting.
Boost for rail travel and clean mobility in EU
recovery plan
29 May 2020
'A boost
for rail travel and clean mobility in our cities and regions’ is included in
the proposals for a major post-coronavirus recovery plan set out by European
Commission President Ursula von der Leyen
EUROPE: ‘A
boost for rail travel and clean mobility in our cities and regions’ is included
in the proposals for a major post-coronavirus recovery plan for the European
Union set out by European Commission President Ursula von der Leyen on May 27.
This
includes changes to the €1·1tr Multiannual Financial Framework budget for
2021-27, and plans for a Next Generation EU recovery plan which would provide
an additional €750bn on top of the MFF.
The
Commission’s proposals will now be subject to negotiations between the EU
member states and the European Parliament.
The
Commission expects the economic impact of the coronavirus crisis to vary
between sectors, with transport to be hit particularly hard. The recovery
strategy encompasses the European Green Deal, with a commitment from industry
to invest in cleaner and more sustainable mobility expected in return for
support for recovery in the transport sector.
Plans to
help create jobs will include a focus on accelerating the production and
deployment of sustainable vehicles and alternative fuels, while the Connecting
Europe Facility would be increased by €1·5bn to €14·521bn to help support the
financing of sustainable infrastructure and a shift to clean urban travel.
Rail
industry response
The
Community of European Railway & Infrastructure Companies welcomed the
announcement, but called for ‘greater detail and ambition’ to promote an
overall shift to sustainable transport.
‘CER
believes that the recovery instrument proposed by the Commission should enable
movement towards green mobility, and ensure that the improvements in air
quality for cities are maintained’, said Executive Director Libor Lochman. ‘CER
therefore calls upon the European Council in its discussions on the Multiannual
Financial Framework and recovery fund to reinforce public transport such as
rail to match citizens’ ambition for a more sustainable society.’
The AllRail
association of non-incumbent operators also broadly welcomed the announcement,
but noted that there was a risk that public support could distort competition
and jeopardise benefits gained from market opening, financial transparency and
non-discrimination.
‘There is
the risk that such a package could provide unfair advantages to state-owned
companies, as we are witnessing already with DB in Germany’, the association
explained. ‘Any recovery package for passenger rail must be fair; plans should
consider all passenger rail companies, including those that are privately owned
and therefore particularly vulnerable in this crisis. It should not permanently
alter the structure of markets, possibly encouraging a return of monopolistic
concentrations.’
AllRail
warned that the potential bankruptcy of private passenger operators would put
the goals of the Fourth Railway Package’s market pillar ‘out of reach forever’.
The
European Rail Freight Association said it supported the allocation of an extra
€1·5bn to the Connecting Europe Facility, as this is ‘crucial’ for completing
transport infrastructure in general and rail freight corridors in particular.
ERFA said digitalisation and technology such as automated couplings and ETCS
which assist the entire sector should also be a high priority for funding.
Rail
freight association Ferrmed called for the recovery plan to be managed directly
by the Commission and implemented strictly according to socio-economic and
environmental criteria, in order to obtain the best ‘investment to results
ratio’ which ‘has largely not been met by the actions taken by member states to
date’.
Ferrmed
said it was necessary to end ‘once and for all’ investments of ‘a political or
extravagant nature’, and instead act ‘where there really is traffic and not
where the socioeconomic and, particularly, environmental impact is negligible’.
Suppliers’
association UNIFE welcomed the inclusion of ‘green and digital transitions’ as
a guiding principle.
Suppliers’
association UNIFE welcomed the inclusion of ‘green and digital transitions’ as
a guiding principle. It would continue to advocate for rail to have a key role
in the Green Deal, and would monitor the inclusion of rail in EU member states’
national recovery and resilience planning.
UNIFE also
said that from the European manufacturers’ point of view, it is important that
the European Commission also made a reference to reinforced screening of
foreign direct investment.
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