Air France and KLM have public affairs delegates working directly with their respective authorities and declared in the lobbying registers of the French and Dutch parliaments, complying with the relevant codes of conduct. Air France-KLM has two Brussels-based representatives to the European Institutions and one intern registered in the EU Transparency Register.
All Air France-KLM expenditure for policy influence accumulates in 2019 to a total of €2.75 million (including staff costs for lobbying activities). The majority of these costs relate to memberships of national and international trade associations. A minor part is spent for the services of consultancies. Air France-KLM, Air France and KLM did not spend money for other policy influence activities such as support to political campaigns, individual politicians or any other political organizations or activity.
Air France-KLM is member of several national and international bodies that represent the air transport sector and advocate its public positions. We participate in major international associations such as IATA, Airlines for Europe, of which we are a founding member, the Airline Coordination Platform, Europeans for Fair Competition and BusinessEurope. At national level we participate in general industry associations, specific aviation bodies and sustainability initiatives.
With these participations, we aim to provide (political) decision makers with the information necessary to understand the issues facing the airline industry, to drive the changes that we believe are crucial, and to advocate the effective implementation and application of national, European and international regulation to avoid any competitive disadvantage.
COMPETITIVENESS OF EUROPEAN AVIATION
European Aviation Strategy
Air France-KLM has supported the European Commission’s Aviation Strategy for Europe, published in 2015, which aimed to ensure that the European aviation industry remains competitive and rightly focused on the indispensable contribution of aviation to Europe’s economy. It contained amongst others an intention to revise an aviation specific trade defense instrument (Reg. 868/2004), which was finally adopted by Council and European Parliament in May 2019.
Air France-KLM generally supports all the initiatives of the European Commission in order to strengthen the competitiveness of European airlines while promoting the energy transition of the aviation sector. This is particularly the case with the “Single European Sky 2+” project, which could lead to substantial savings in CO2 emissions by promoting more direct and optimized routes within European airspace.
Air-France-KLM regrets, that the Aviation Strategy has not yet resulted in legislative proposals as regards the abuse of a dominant position at certain airports in setting airport charges and the practices implemented by some airlines, who do not respect the home-base principle with regard to applying social security laws. It is key that the new European Commission takes these important issues further.
Schiphol Airport capacity
It is essential for the Group that additional growth possibilities are granted at Schiphol airport to allow for the development of KLM.
The so-called “Alders” covenant dating back to 2008 determined that until 2020 Schiphol can develop up to 500,000 aircraft movements, (this level was reached in 2019). In 2019 the Dutch a principle decision has been taken that Schiphol can grow, however formalisation of this decision is still pending in parliament.
In the Alders-covenant it was also decided that 70,000 movements should be done at Lelystad Airport and Eindhoven Airport. The opening of Lelystad airport however, originally foreseen in April 2018, has been delayed multiple times and now will not take place before late 2021.
The Group contributes to the European institutions’ work on a revision of the EU consumer rights and calls upon these institutions to finalize their work. It remains vigilant that the rules are proportionate to their objective and are applied equally to all airlines operating to, from and within the European Union. In this respect, Air France and KLM do their utmost to prevent any inconvenience to passengers.
French environmental taxation
In the context of the current debates on fuel taxation and the possibility of taxation of kerosene for domestic flights, it seems important to take into account that French air transport is already heavily taxed.
In order to continue to be a major economic actor in the development of countries and territories, air transport must be able to rely on a coherent, comprehensive and incentive regulatory and fiscal framework, facilitating and accompanying its necessary energetic transition.
Aeronautical kerosene is indeed not taxed, for historical reasons, but the tax contribution of air transport related to its activity (civil aviation tax, solidarity tax, EU-ETS) amounts 1 billion euros annually in France.
From 2021, for its international flights, air transport has also committed to reducing its greenhouse gas emissions via a global carbon offsetting system (CORSIA), concluded within the framework of the United Nation’s aviation organization International Civil Aviation Organization (ICAO). The estimated cost of this system is €100 to €150 million per year for the Air France-KLM group by 2025.
As per January 2020, airline tickets issued by all airlines now attract a tax on all flights departing from France (but not on flights arriving), except connecting flights. This tax will raise funds for investment in other transportation infrastructure, including rail. Such legislation may have a significant negative impact on the Group’s operations and growth, which could be reflected in more substantial costs, and could lead to competitive distortions between airlines when applied solely to a specific geographical area.
The Group regrets that such additional taxation will not serve the environmental transition of the sector through a contribution to a Sustainable Aviation Fuel fund.
Dutch aviation tax
The coalition agreement of the current Dutch government (2017-2021) indicates that aviation needs to implement sustainability measures in exchange for further growth possibilities. The Dutch ambition to introduce a European tax was not adopted during the negotiations on the Paris climate targets. Despite the implementation of a further differentiation of charges for noisy and polluting aircraft at Schiphol Airport in 2019, it was also decided that a national air passenger tax will be introduced in 2021. The revenues of this tax will be channeled back to the general government budget and will therefore not benefit the environment. This takes away finances from the aviation sector that could otherwise have been invested in cleaner aircraft, the development of biofuels or other sustainable initiatives.
It goes without saying that Air France-KLM is in favor of more sustainable aviation, but the Group is against any national air passenger tax that does not help the environment. Travelers will then be tempted to take the car to fly from abroad. Also a study done by CE Delft in 2018 concluded that the intended aviation tax will have no positive environmental impact. Especially with the COVID-19 crisis further impacting the liquidity of airlines and investments foreseen to make the sector more sustainable, the introduction of the Dutch ticket tax is questionable.
Air France-KLM welcomed the renewed focus on sustainability in Europe through the European Green Deal that was presented in December 2019. The Group supports initiatives and proposals that enable the sector to decarbonize in an effective and affordable manner though initiative as the completion of the European Single Sky and the production and deployment of Sustainable Aviation Fuels in Europe. Other measures, which merely add financial burden without helping the sector to become more sustainable, should be avoided.
A global carbon offsetting scheme from 2021
Air France-KLM supports the first sectoral United Nations agreement to reduce emissions at a global level, allowing aviation to meet its climate obligations whilst continuing to meet the increasing demand for mobility and economic growth around the world. This agreement designed CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) which aims to stabilize net CO2 emissions from international aviation at 2020 levels.
The Group welcomes the decision taken at the last ICAO General Assembly to start work with a view to adopting a long-term objective for reducing CO₂ emissions compatible with the objective of the Paris Agreement and which could be approved by member states at the next assembly in 2022.
The Group urges regulators to take the necessary actions to allow for a timely preparation and effective implementation of CORSIA, including credible offsets and strong governance to ensure a global level playing field and carbon reduction targets.
During its 40th General Assembly in October 2019, the ICAO resolved that “CORSIA is the only global market-based measure applying to CO2 emissions from international aviation so as to avoid a possible patchwork of duplicative State or regional MBMs, thus ensuring that international aviation CO2 emissions should be accounted for only once.” In this context, Air France-KLM considers that its CO2 emissions are not subject to both the European ETS and CORSIA at the same time. Furthermore – assuming a change to the provisions of the European ETS – Air France-KLM is calling for a detailed impact study to be conducted on the envisaged amendments. In addition, the Group is drawing attention to the need for the prior design of a carbon adjustment mechanism at the frontiers of the European Union, to protect the European airlines from “carbon leakage” which neutralizes or even aggravates the environmental impacts and benefits their international competitors.
Sustainable Aviation Fuels
In addition to the CORSIA agreement, clear commitment and action from all stakeholders is needed to implement all four pillars of the industry’s united strategy including the development of sustainable aviation fuels. The Group actively participates in the global Sustainable Aviation Fuel User Group (SAFUG) and the European Advanced Biofuel Flightpath 2020 initiative, which is conducted in partnership with the European Commission, Airbus, IATA, other European airlines and European biofuel producers to get more rapidly sustainably produced aviation fuels to the market. Currently the Advanced Biofuel Flightpath is co-chaired by KLM.
The long-term collaboration between KLM and SkyNRG led to KLM’s commitment to purchase 75% of a new SAF production plant to be built in Delfzijl in the north of Holland. This production location with a total SAF capacity of 100,000 tons per year is expected to become operational in 2023. Additionally, KLM works with other Dutch partners on the development of synthetic fuel projects in The Netherlands.
In 2017, Air France signed an Engagement for Green Growth (Engagement pour la Croissance Verte – ECV) with the French Ministry for the Ecological and Inclusive Transition, the French Ministry of Transport and the French Ministry of the Economy and Finance, along with four other major French industrial companies (Airbus, Safran, Suez and Total). This Engagement for Green Growth aims to promote the emergence of sustainable aviation biofuel industries, in economically viable conditions that fully integrate circular economy principles. Its conclusions were published in January 2020, together with a French governmental roadmap to set, on the basis of the ECV recommendations, the principles and ambition for Sustainable Aviation Fuel incorporation and the launch of a call for expressions of interest to build production facilities in France.
Air France-KLM is in favor of the European Commission’s plans to include in the recently revised Renewable Energy Directive (RED II) policy mechanisms to advance the deployment of sustainable aviation fuel and ensure that Europe maintains an internationally competitive position in renewable fuels for aviation. Lastly, the Group is very exacting as regards the sustainability standards of the Sustainable Aviation Fuel it uses.
Air France-KLM continues to closely follow the Brexit negotiations and the discussions on the future trade relationship between the EU and the UK. Part of this process is informing national and European politicians and policy-makers of the possible impact to the European aviation sector and suggest solutions for continuing smooth operations when the transition period expires.
In the end the Group wishes to see a fair comprehensive EU-UK air transport agreement, as the UK remains one of the most important markets and it is essential that good connectivity and a level playing field between the UK and the EU are ensured. This level playing field should not only apply to market access, but also in the areas of sustainability, high social standards, passenger rights and other rules affecting the operation of airlines. In the meantime, we further prepare to limit possible negative consequences in case there will be a no-deal outcome in the negotiations on the future relationship.