Low-cost airlines: the State uses carrots and sticks (and shells out 340 million euros)
In 2021, air transport is trying to get back on track after the Covid years: the data still shows -58% compared to 2019. The majority of subsidies (340 million euros) go to low-cost airlines. Facts, numbers and insights
2021 was the year of the recovery of air transport: 80.5 million passengers for 737 thousand. Numbers still far from pre-covid ones but recovering. The annual report to parliament of the Transport Regulatory Authority offers a picture of the state of health of the entire transport world in the first 10 years of the ART.
ALL AIR TRANSPORT NUMBERS
In 2021, 80.5 million passengers were transported in Italy, "this quantity records a significant increase compared to 2020, equal to 53%", we read in the ART's annual report to parliament. “In comparison with 2019, there is a decrease of 58%”. This data confirms the fact that the gap compared to the pre-covid period has not yet been filled. “As regards 2022, the number of passengers has doubled compared to 2021 , reaching a share equal to 85.5% of the values recorded in 2019”. Domestic transport grew more than international traffic. A similar argument applies to the number of flights at Italian airports in 2021, equal to 737 thousand, an increase of 34% compared to the previous year. Also in this case, the comparison with 2019 shows a contraction of 49%, "although in strong recovery compared to 2021 (+69%), it has not yet completely recovered the 2019 level.
THE PERFORMANCE OF LOW COST AIRLINES
A very interesting fact concerns low cost airlines. “With reference to the types of airlines that pass through Italian airports, growth in the market share of low-cost airlines was also noted in 2021, both in relation to domestic and international traffic”.
SUBSIDIES FOR 340 MILLION EUROS TO AIRLINES (NOT JUST LOW COST)
This data must be accompanied by another. The Transport Regulatory Authority recently concluded the monitoring of the subsidies paid from 2015 to 2022 by airport companies to airlines as incentives for "flying activity". The amount of these subsidies reached its highest value last year, equal to approximately 340 million euros.
65% OF THE SUBSIDIES GIVEN BY AIRPORT COMPANIES GO TO LOW COST AIRLINES
As Il Fatto Daily writes, 65% ends up with Ryanair (221 million), another 30% is divided between Easyjet and Wizzair, the remainder between the other companies. The control on the matter is carried out on the basis of the regulatory measures established by the Authority with its models for airport charges and prescribe obligations of predetermination of the criteria for choosing the beneficiary, compliance with the criteria of transparency and maximum participation of the air carriers potentially interested in the incentives. Low cost airlines , however, not only receive subsidies from airport managers but also from territorial and local development bodies: the total could be between 450 and 500 million euros.
12.6 BILLION EUROS SPENT ON THE RESCUE OF ALITALIA IN 45 YEARS: 280 MILLION PER YEAR
Il Sole 24 Ore, reporting the data from the study " Estimate of direct, public and collective costs, originating from the management of Alitalia (1974-2014) " by Mediobanca, notes that our country spent 12.6 billion euros to save the airline flag. “The starting point is the Mediobanca study , which calculated Alitalia's direct costs from 1974 to 2014 at 7.4 billion – we read in Il Sole 24 Ore -. That value updated to date is equal to 7.62 billion. Add the 75 million paid by Poste at the end of 2014 for the Etihad operation, the 900 million "loaned" in 2017 by Paolo Gentiloni's government, we arrive at 8.6 billion, plus 145 million in interest, not repaid". A figure that is around 280 million annually.
WITH LOW COST AIRLINES THE GOVERNMENT USES CARROT AND STICK
The executive is using carrots and sticks with low-cost airlines. The government has entrusted the Authority led by Nicola Zaccheo with further powers to monitor these subsidies. At the same time, Adolfo Urso's Ministry of Business and Made in Italy (Mimit) has prepared an amendment to correct the rule to combat high flight prices . Any reference to the maximum price cap on airline tickets to and from the major islands is eliminated and the Competition and Market Authority (Agcm) is entrusted with the investigation of abuses using algorithms, tracing them to restrictions on competition and dominant position. The text of the amendment, present in the Asset decree currently being examined by the Senate Industry Commission, would be the result of the meeting between the air carriers and Minister Urso, which was held at Mimit last Thursday 14 September 2023. A summit anticipated by rumors regarding the intentions of low-cost companies to cut some scheduled air connections in the 2023 winter season, and to cancel a further 10% of routes.
THE COMMENT OF THE PRESIDENT OF ART ZACCHEO: THE AMENDMENT TO THE "CARO FLI" IS WELL
In this regard, the President of the ART Nicola Zaccheo expressed "appreciation for the amendment presented by the Executive in the context of the "expensive flights" rule included in the so-called asset decree, (paragraph 7), which attributes new and more effective monitoring powers to the Transport Regulatory Authority for the benefit of the transparency and homogeneity of the criteria used by airports for the granting of subsidies for the development of routes".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/compagnie-aeree-low-cost/ on Fri, 29 Dec 2023 07:12:09 +0000.