The Brief – Air EU is now ready for boarding

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Europe’s airlines are set to get more than €30 billion in coronavirus-busting aid. But do we really need so many flyers? And wouldn’t the EU be better off setting up its own carrier?

Only four EU countries do not have a flag-carrying airline, most of which transport the name of the country or people around the world on the sides of aircraft. Go to any big airport and you will see a smorgasbord of brightly-coloured tail-fins lined up at the gates.

As well as those firms – which enjoy special privileges – there are the numerous low-cost flyers and competitors that also ply the airways. For every Aer Lingus and British Airways, there is a Ryanair and an EasyJet waiting in the wings.

Compare this patchwork of companies and vested interests with the US, where four major airlines – American, Delta, Southwest and United – essentially rule the roost over coast-to-coast and international flights.

The virus outbreak’s devastating impact on aviation has prompted governments to leap to the aid of their airlines, even though some of them were already losing money hand-over-fist before the pandemic struck.

Some operate on routes that really do not need a dedicated airline and only serve to safeguard jobs. For many, their existence is inextricably linked to national pride rather than commercial logic.

So here is an idea for the ‘things the EU could be quite good at’ folder: the Union should have its own airline, which would eventually replace this hodge-podge of connections and quarrelsome operators.

Industrial policy hawks regularly trumpet the past success of Airbus in cornering a huge chunk on the global aerospace market, so why not replicate that model when it comes to operating the planes?

The advantages are easy to see. ‘EU Airways’ would only fly routes that do not have a viable rail alternative, be able to invest directly in cleaner technology and would prioritise passenger rights. Three things the current national fleets fail to do on a regular basis.

Over the years, airlines have already tried to tap into that ‘Pan Am’ vibe. Eurowings and Air Europa’s names hardly betray the fact they are German and Spanish. Passengers would lap it up.

Would it be a monopoly? Of course. But see it as an opportunity to put a fair financial and environmental price on air travel, something that the UN’s aviation agency completely disregarded earlier this week.

Slapping an EU flag on a plane tail also builds that soft power the Union’s advocates have long yearned for. It is something UK PM Boris Johnson is trying to do with an expensive gaudy new paint job for his government’s official jet.

This genius idea will, of course, never get off the ground, as the EU is the sum of its member state parts. Turkeys do not vote for Christmas. But there are still serious problems the aviation industry will have to overcome regardless.

Air and rail travel firms have to start working together more efficiently and not treat each other as competitors. Austrian Airlines is leading the way in that regard, announcing yesterday that its Vienna-Salzburg route will be scrapped and replaced by a train service.

Coronavirus could yet spark substantial mergers between Europe’s flyers, as even billions in aid might not be enough to prop up some of them for long. Many will simply go bankrupt without further state bailouts.

Even if the ‘Union Air’ idea is unlikely, Europe’s airline industry is on course to look more like the US sector. For many, it might be a case of consolidate or die.

The Roundup

The Commission lost patience with ten member states over their failure to protect passenger rights and launched infringement procedures. Greece and Italy were hit with two separate bouts of legal action each.

EU rules on bank card payments are saving Europeans up to €2bn every year, a new report has concluded. It is good news as the virus outbreak is expected to bump up permanently contactless and electronic payments by as much as 10%.

French Prime Minister Édouard Philippe resigned – as expected – and was swiftly replaced by Macron-ally Jean Castex, who is best known for overseeing France’s virus deconfinement strategy.

The British government revealed which countries will now be exempt from its 14-day-long quarantine requirements. Belgium and 18 other EU countries are on the list.

Germany is refusing to unveil the details of its €4bn state compensation package for energy firms, as part of its coal phase-out plan. Commission experts will decide whether nuclear can be classed as ‘green’ for investment purposes.

Chancellor Angela Merkel and Commission boss Ursula von der Leyen have worked together for nearly two decades and yesterday discussed how best to drag Europe out of crisis.

The Bundesrepublik’s stint at the head of the EU Council rotating presidency got off to an inauspicious start though. The press point with Merkel and von der Leyen did not have live interpretation and most journalists were unable to attend.

Merkel hopes to oversee a deal on the EU’s recovery fund and long-term budget. Beatriz Rios spoke to the head of the committee of the regions about all things cohesion policy. Read the full interview here.

EU farm boss Janusz Wojciechowski says the bloc should do more to boost ‘agro-diversity’., while NGOs want a moratorium on gene drive tech. Check out the latest edition of the Agrifood Brief and the podcast here. Your dose of Tweets of the Week is also waiting for you.

[Edited by Benjamin Fox]

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