Ref. Ares(2020)3785397 - 17/07/2020
Subject: Flash report: Commissioner Valean meeting with A4E CEOs
Attendees: Michael O’Leary (Ryanair), Willie Walsh (IAG), Carsten Spohr (LHG), Johan
Lundgren (Easyjet), Topi Manner (Easyjet), Kenton Jarvis (TUI), Steve Heapy (Jet2). COM:
Adina Valean, Henrik Hololei, Filip Cornelis, Walter Götz, Filip Negreanu, the undersigned.
Introductory remarks
AV started by explaining the political objectives of the new Commission. Need to steer the
aviation sustainability debate together to get public acceptance. Mentioned her mandate on
sustainability, digitalisation, social and develop a transport strategy. Referred to the EGD
adoption tomorrow. Here to listen to you and what you expect to happen.
M.O’Leary(A4E Chair): EU’s single aviation market has been a great success of the EU over
the last 25 years. A4E promotes free mobility. Want to help you achieve your mandate. As
A4E, we will invest 170bn $ in new more sustainable planes over next 10 years (will replace
its own fleet within that timeframe). Want aviation to remain cheap so against taxation as it
solves nothing to sustainability. Peripheral countries cannot afford to lose connectivity and
make travelling more expensive.
A4E CEOs then raised 3 issues:
1. Sustainability of aviation
W.Walsh (IAG): committed to do our part on sustainability. No alternative to kerosene today,
growth of emissions so recognise we need to take action: purchase of new aircrafts,
supporting a strategic aeronautical industry. IATA committed to 50% emissions reduction by
2050. A4E thinks A4E needs to be more ambitious and will soon commit to do more. SES is
part of the solution. SAF is part of the solution. We don’t want to move now because we fear
the taxation debate but because we can afford to do it today. Taxation will slow our initiative
down.
2. SES
C.Spohr (LHG): 10% of emissions savings should we have SES. Out of LHG 800’s aircrafts,
it means equivalent of 80 planes for me just burn fuels and add emissions for nothing. Time
to overcome the resistance. Airlines, companies, citizens want this. Bit more optimistic on
SES thanks to sustainability argument.
3. Taxation
J.Lundgren (Easyjet): wrong belief that aviation is exempted to tax due to no tax on kerosene.
Listed all taxes Easyjet pays yearly. Want to have positive messages about what aviation
brings versus being defensive on taxes. Labelled green taxes but it does opposite of what it is
supposed to do as it is not reinvested to make aviation greener. Taxing aviation causes also
issues (e.g; T.Cook bankruptcy) as it removes funds from what airlines could do with it to fly
more sustainably.
S.Heapy (Jet2): tax reduces supply, reduces demand. Want to maintain connectivity. We can
invest more in green technologies than what governments can do with taxes.
T.Manner (Finnair): investments in new engine technologies, SAFs are much more efficient
tools. Taxation is a negative incentive for investment. Want the industry to be part of the
solution with regulators. Financial incentives for SAFs (synthetic biofuels for a start, power
to liquid, etc.). Mentioned Chinese competition.
K.Jarvis (TUI): 150 aircrafts in 5 companies but also hotels, etc. Contribute to tourism.
Increase of taxes in Germany. Unintended consequences on tourism.
T.Reynaert (A4E): repeated same arguments as other interlocutors. We know we have a good
partner in you and DG MOVE. But EGD creates a momentum against us while we do a lot,
we need to communicate more and better about it, should have done it before.
AV stressed that she understood all their arguments. Asked questions on efficiency of
aircrafts as no technology available yet, keen to know savings thanks to new aircrafts
purchase. On SAF, biofuels will be criticised so not ideal to use this argument. How far are
we with SAF? Asked on blending for SAF and positive incentives. On SES, we managed to
keep it alive at Transport Council but need to push next Presidency. Tourism and sustainable
tourism are very good arguments.
W.Walsh: Taxes won’t stop people flying but it will mean less people in these planes. No
alternative to SAF. 80% of pollution of aviation is on flights longer than 1500kms where no
alternative to aviation, really.
C.Spohr: while solutions for short range flights will come, for larger aircrafts (above 150 pax)
and longer distance, need SAF, need new technologies such as wind/air to combine. 0.01%
use of SAF so huge potential, need incentives to use it, not punishments. Problem of
competition at EU’s borders so need a level playing field with non EU players. If you add
social and infrastructure costs, need to keep european aviation competitive.
J.Lundgren: let’s be technology neutral and not rule out any as nobody knows. Need
incentives to develop these.
T.Manner: problem of lack of supply if biofuel mandate, risk is that it will keep prices high.
Second one is that raw materials may be produced in a different place than where it is used so
if it ends up being shipped, it could be counterproductive so need to incentivise local
production too.
T.Reynaert: A4E in favour of future COM’s work on SAFs but be careful on blending
mandate’s caveats mentioned. Keen to support on both SAF and SES. Need industrial policy
on SAF. Mentioned A4E’s invitation to its event early March.
S.Heapy: 81% of TUI hotels are certificated environmentally as well as local projects.
Important role of aviation for tourism especially in southern Europe and in peripheral islands.
AV wrapped up the meeting by stressing today’s political reality. Sustainability debate there
to stay. Also reserved on taxation issue. Need to look at industry with all its players (airports)
and will try to take a cautious approach on all this in the future.
