Europe’s carriers are losing out to non-European competitors due to rising aviation taxes, emissions trading costs, requirement to purchase sustainable aviation fuel (SAF) and closure of Russian airspace, according to airline bosses.
Air France-KLM chief executive Ben Smith argued: “We’re 100% aligned around the need to decarbonise. But many of our competitors don’t have SAF mandates and don’t have taxes.”
He told the Airlines for Europe (A4E) in Brussels “It’s a big challenge when we have costs our competitors don’t have. The number-one thing we’re looking for is a level playing field.”
Tui Group chief airline officer Marco Ciomperlik said: “We need to ensure a balanced regulatory burden. We can’t support additional national airline taxes and energy taxes on aviation. It distorts competition.
“There is a risk that EU airlines will lose out in favour of neighbouring countries, especially where tourism is a significant driver of the economy. Additional taxes disproportionately affect those economies.”
Luis Gallego, chief executive of British Airways owner IAG agreed, saying: “Aviation is a global business, and we need to compete. [But] we compete against global carriers which don’t have these taxes.”
Smith said the closure of Russian airspace to Europe’s carriers since Russia invaded Ukraine in 2022 was proving a disadvantage, noting “a flight from Paris to Tokyo takes two-to-three hours longer and is a huge advantage for Chinese airlines” which continue to fly over Russia.
However, Lufthansa Group chief executive Carsten Spohr noted: “We see some passengers avoid airlines using Russian airspace.”
He suggested government subsidies of carriers in the Middle East had reshaped the market between Europe and Asia, saying: “Lufthansa used to fly to 14 Asian destinations, now it’s only two because all the traffic is going through government-owned hubs.
“The prices they offer, the subsidies they have, the labour contracts we have – we can’t compete.”
Smith agreed: “We have minimal services now to Southeast Asia, similar to Lufthansa. We lost it all to Middle East carriers and it’s not coming back.”
Ryanair chief executive Michael O’Leary asked: “Why allow airlines to land here if they fly over Russia, and why are Gulf carriers flying into Europe and not paying into Europe’s emissions trading scheme? They should pay their share.”