Additional subsidies and a lack of political regulation
In addition to taxation, there are other factors that indirectly subsidize air travel or keep ticket costs low:
Subsidization of regional airports
A total of 14 German regional airports receive direct financial subsidies of approximately €39 million per year. While most of these airports generate losses, they keep operating based on these direct subsidies and on indirect subsidies via guarantees, warranties and other grants. This is economically and environmentally nonsensical, as only three of the 14 airports make a relevant contribution to connectivity. The subsidies also increase the environmental costs of flying compared to other modes of transport. In 2019, it was decided that subsidies for regional airports would increase even further. However, the Covid-19 pandemic will drastically worsen the poor financial situation of airports.
Subsidization of aircraft manufacturers
Since 2004, the EU and the U.S. have been at odds over whether the other economic area provides subsidies to the aircraft manufacturers Boeing and Airbus in violation of applicable global trade law. In 2018 and 2019, the World Trade Organization (WTO) confirmed that the aircraft manufacturers were illegally subsidized. Boeing benefited primarily from a reduced corporate tax, according to the WTO. This gave the company advantages in the competition for orders. In other cases, too, the governments directly subsidized their aircraft manufacturers with large sums of money. This occurred, for example, through guarantees intended to provide security for investors, subsidization of social plans, the granting of favourable loans, the establishment of new airlines after insolvency and aid following the decline in air passenger numbers as a result of the terrorist attacks of September 11 2001.
Working conditions of budget airlines
Cheap tickets from low-cost airlines sometimes conceal poor working conditions for employees. According to reports, at some airlines both pilots and flight attendants often work as (pseudo) self-employed workers or are employed on temporary contracts and are not paid when off sick. Without a set number of hours per month, their earnings are uncertain; they have to pay for training and their work attire themselves.
Support given to aircraft industry during the Covid-19 pandemic
The aircraft industry was strongly affected by the Covid-19 pandemic and is recording extremely high losses. Nevertheless, it is important not to delay the necessary developments in climate protection in the industry. Several voices including Oeko-Institut and Green Budget Germany (FÖS) advocated linking state aid given to the airline industry with the implementation of climate protection measures, e.g. increased investment in climate-friendly technologies and the switch to more modern aircraft.
By the end of June 2020, European countries pledged a total of approx. €30 billion in aid for airlines. Lufthansa will receive the most extensive state aid, €9 billion in the form of loans and a partial takeover of the airline. Only two of the 21 European rescue measures – for Austrian Airlines and Air France – are linked to the implementation of climate protection measures; these airlines are to halve their domestic flights emissions by 2030 and 2024, respectively. Austrian Airlines additionally has to reduce total emissions per passenger and kilometer by 30% by 2030 compared to 2005. The airline also needs to reduce domestic flights, particularly on routes where rail journeys take less than three or two and a half hours. These targets, however, are not legally non-binding.
Poor political conditions for night trains as an alternative to flying
Night trains can be an alternative to flying. Various political obstacles would have to be overcome, however, in order to make greater use of them. These obstacles currently prevent the climate protection potential of night trains from being fully tapped.
High track access prices: One of the biggest problems for night trains are the track access charges, which have to be paid per kilometre in rail transport. These charges amount to €9 to €22 per train kilometre. This makes night trains unprofitable because aeroplanes do not have these costs. If night trains also use high-speed lines, the track access charges are even higher by a factor of 4-5. Track access charges account for 60% of the cost of night trains. A different model is needed here which takes into account the long routes and off-peak times that apply to night trains.
Lack of a purchase organization: In contrast to all other European countries, Germany lacks a purchase organization for long-distance rail transport that plans and puts night train services out to tender. Without such an organization, no services are created. This lack in Germany, in the centre of Europe, also hinders the planning meetings of the other European countries for cross-border rail transport.
Lack of political vision: Germany’s climate protection program for transport includes many billions of Euro for Deutsche Bahn, but no targets for which additional routes and new services are to be created with this money. There is a lack of political will and vision in Germany for modern, comfortable night trains that connect passengers with neighbouring countries without causing emissions. Such services could be fully implemented in one legislative period; many other transport projects in the rail sector that create environmentally-friendly alternatives take 15 to 30 years to implement.
Little support from major rail companies: In countries with high-speed rail services, major rail companies tend to see night trains as competition to high-speed inter-city services. Night train services are therefore more likely to be cancelled than created. This also explains why the Austrian Federal Railways (ÖBB), which does not operate a high-speed network, has taken over German night train services. Governments and the EU must not rely on the rail operators but develop their own project plans.
Lower capacity: A normal train car can carry about 60 to 70 passengers; and the train can travel the same route several times a day. A sleeper car can take half this number of passengers at most; the train only travels the route once every 24 hours. In addition, bedding has to be cleaned; and personnel costs can be higher due to extra pay for night work. These factors increase costs. In the past, night train services were discontinued even though they had a high customer utilization. These higher costs will continue to apply in the future so the services should be promoted in competitive procedures that are dependent on the environmental benefit.
Use conflicts: The rail routes are actually much less busy at night and would thus have capacity for night trains. But construction sites are often set up at night, slow freight trains run on some key lines and there are congested junctions. There are also bottlenecks at stations, mostly in the morning. According to an analysis by the International Union of Railways (UIC), however, these problems can be overcome. An analysis of route utilization in Europe has also shown that most countries have enough spare capacity in their existing rail networks.
Lack of a coordinated booking and information system: There is no uniform European cross-border platform of rail operators for night trains, which passengers could use to search services and buy tickets. However, without simple, official booking platforms, the market will not be tapped.
Lack of compatibility: There are technical problems due to different track gauges, electricity supply or signaling systems, which each country develops for itself. Despite European integration, these problems are increasing rather than decreasing. The International Union of Railways (UIC) believes that these obstacles can be overcome; however, it also requires political will to coordinate this.