ORGANIZATION

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 registered in the EU Transparency Register.

All Air France-KLM expenditure for policy influence accumulates in 2018 to a total of €1.64 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 and BusinessEurope. At national level we participate in general industry associations, specific aviation bodies and sustainability initiatives.

With these participations we aim to provide government representatives 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. Part of this Strategy was the review by the EU institutions of an existing but badly functioning European trade defense instrument to fight unfair competition by third-country carriers affecting European airlines.

Furthermore, Air France-KLM has supported the granting of mandates to the Commission to negotiate comprehensive air transport agreements between the EU and third countries, including Gulf States.

Air-France-KLM regrets, that the Aviation Strategy has not yet resulted in legislative proposals as regards the abuse of monopoly power by 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.

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 already almost reached in 2018). It was also decided that 70,000 movements should be done at Lelystad airport and Eindhoven.

The opening of Lelystad airport however, originally foreseen in April 2018, has been delayed a few times and might now only take place in 2020. In addition, the rules the Dutch government had proposed to move some O&D traffic from Schiphol to Lelystad airport, freeing slots at Schiphol for long haul flights adding to the network and the economy, have not been approved by the European Commission as they would prevent new entrants to develop at Lelystad. The Dutch government is now redrafting the air traffic distribution rule, taking into account the EC’s concerns.

Consumer rights

The Group contributes to the European institutions’ work on consumer rights. It remains vigilant that the rules are proportionate to their objective and are applied equally to all airlines operating to and from 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. Unlike other modes of transport, airlines are subject to taxes and fees, the revenues of which are used to finance all of its infrastructure costs. This has been widely documented in different official reports in recent years. A tax on kerosene would result in additional charges which would lead to a reduction in essential air services for the French Regions for which no efficient alternative modes of transport exist. In addition, such a tax would deprive Air France-KLM from the possibilities to renew its fleet and limit its CO2 emissions.

In sum, domestic and intra-European flights are subject to the EU Emissions Trading Scheme. For its international flights, air transport has also committed to reducing its greenhouse gas emissions from 2021 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.

Dutch aviation tax

The coalition agreement of the current Dutch government (2017-2021) indicates aviation needs to implement sustainability measures in exchange for further growth possibilities. European agreements on taxes on aviation will be pursued as part of the negotiations on the Paris climate targets scheduled for 2019. The possibility of further differentiation of charges for noisy and polluting aircraft will also be examined. If both paths do not deliver adequately, an 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 a 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.


SUSTAINABLE AVIATION

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. We call for a long term carbon reduction target under ICAO in order to contribute to the 2 °C global climate target in the Paris agreement.

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.

The Group expects CORSIA to be the only measure applicable to emissions from international flights within Europe in the future. A system of double charging in which airlines would be obligated to pay twice for the same emissions (CORSIA and EU-ETS) would contradict the terms of the ICAO agreement. It affects the competitiveness of EU airlines and has limited environmental benefits, as an important share of the traffic would not disappear but would be routed via extra-European hubs, causing similar or sometimes higher amounts of emissions.

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 Dutch Government, KLM and other Dutch partners work together towards continuous production and supply of sustainable aviation fuels in the Netherlands. These initiatives build on the objectives of the Green Deal between the Dutch Government and KLM.

Air France has gathered several partners committed to the development of biofuels in France, with the ambition of mobilizing the French government. In 2017, Air France signed with the French Ministry for 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), the Engagement for Green Growth (Engagement pour la Croissance Verte – ECV). The ECV aims to promote the emergence of sustainable aviation biofuel industries in France, in economically viable conditions that fully integrate circular economy principles.

Air France-KLM is in favor of the European Commission’s move to include in the recent revision of the 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.

French Air Transport Assises

The French Air Transport Assises concluded on 8 March 2019 after a year. This closing gave rise to a presentation of a National Strategy for Air Transport (NSTA) aimed at “Ensuring the sustainable development of a world-class French air transport serving as an essential connectivity tool for each of the territories”. This strategy is based on immediately applicable measures and others to be implemented by 2025.

The measures adopted at this stage represent an annual saving of around €60 million per year for Air France. These measures however only partially reduce the competitiveness gap of the French fiscal and social environment for aviation compared to the one prevailing in other major EU member States.

The monitoring of the implementation of the French National Air Transport Strategy will be entrusted to the Superior Council of Civil Aviation (CSAC). Air France-KLM calls on the French Authorities to pursue an ambitious strategy to help the French air transport sector to regain additional competitiveness to the benefit of the entire French economy and the travelling public.


BREXIT

Air France-KLM has been closely following the Brexit negotiations. Part of this process is informing national and European politicians and policy-makers of the possible impact for the aviation sector of the United Kingdom exiting the European Union. Air France-KLM would have preferred the UK to remain a member of the EU. The UK is one of the most important markets and it is essential that good connectivity between the UK and the EU remains.

The Group wishes to see an orderly Brexit if the UK does leave. If UK airlines would want to have similar benefits operating in the EU internal market, they will have to accept the same rules European airlines have to work with (including the remit of the European Court of Justice). In the meantime, we further prepare to limit possible negative consequences. Furthermore, it is essential that the EU and the UK agree on a comprehensive air transport agreement for the future relation.


© AIR FRANCE KLM