A cheap airline ticket doesn’t fall from the sky
Travel Feb 29, 2020
A round trip flight from Amsterdam to the south of France costs the same as a round trip ticket to the Dutch island of Terschelling. How is that possible? Part of the answer can be found in the enormous subsidies that go to the aviation industry. Ties Joosten from the Dutch platform for investigative journalism Follow the Money mapped as many of these subsidies as possible. Aviation, the most carbon intensive mode of transport, is heavily subsidised and its emissions will continue to soar until these are addressed.
This article was originally published in Dutch by Follow the Money on July 25th. The analysis was performed by the author. T&E translated the text, which doesn’t imply validation of the values used.
What did we discover?
We discovered why flying within Europe is cheaper than taking a train. The aviation industry is connected via international, national and regional governments to an incomprehensible tangle of subsidies, tax exemptions and public investments. Our tax money contributes to making airline tickets so cheap.
How did we investigate this?
For many weeks we investigated public records from municipalities, provinces, ministries, NATO, the WTO and the EU, and we talked with different experts.
This investigation also has some limitations: it does not provide a full picture of all subsidy flows to the aviation industry; it is not a comparison between aviation and other forms of transportation; and this investigation does not take into account the added value of aviation (in terms of tourism or employment).
Why should I read this?
Due to immense subsidies to the aviation industry, low income people help pay for the flights of the rich. Moreover, travel by plane is a significant contributor to climate change, which has to be addressed by society as a whole.
In June, the Dutch secretary of state for Finance Menno Snel joined representatives of 29 countries to discuss, among other things, climate taxes for the aviation sector. Prior to the conference, he stated in the Dutch newspaper NRC that he wanted to levy excise duties on kerosene because “all forms of transportation have to contribute to fighting the pollution they cause. At the moment, this is not the case for aviation.” Tips?
It is improbable that this is the full story. It is quite possible that we have overlooked some kind of funding or cash flow from a government source to the aviation industry. Therefore we ask: Do you know of other kinds of cash flows from governments to the aviation industry that we missed? Please let us know by emailing the author at email@example.com.
Let’s take a trip together
Iren and Naomi work hard all year. He is an illustrator, she works as a medical doctor in a hospital and is looking to specialise. They live in Rotterdam. When Naomi works the night shift, they barely see each other. That’s why they have decided to take a trip together. They both take a week off and book a flight to Toulouse, in the south of France.
They take the plane on a Friday afternoon, and travel with the Dutch airline KLM, part of the Air France-KLM group. “This cost us €80, and it wasn’t even the cheapest flight we could find,” Naomi says. “But we wanted to fly there on a specific date and flight, which meant we had fewer options. Besides, Schiphol airport is really close. The evening of our flight we’ll already be sitting with a cold beer on a terrace in Toulouse!”
All extra fees included, Iren and Naomi pay €81.65 per person for a round trip flight with KLM from Schiphol to Toulouse. How is this possible? How can a round trip flight to Toulouse cost the same as a round trip ticket to Terschelling, one of the Wadden Islands in the north of the Netherlands?
To answer this question, Follow the Money will virtually join Iren and Naomi on their trip. During the journey we map as many subsidies – which make this dirt-cheap flight possible – as we can. Fasten your seatbelts!
VAT exemption: €7.35
The first tax exemption is already booked at Naomi and Iren’s kitchen table: in the Netherlands you do not have to pay VAT on airline tickets unlike train tickets, on which 9% VAT is levied. This means that when buying their airline ticket, Iren and Naomi have already saved €7.35 per person in VAT.
To travel by plane, Iren and Naomi first have to get to Schiphol Airport. That may seem obvious, but it is good to be mindful that there is no means of transportation as dependent on other means of transportation as flying. Since the airport itself is never the final destination, everyone has to make an extra trip by car or public transportation to get home or to the city centre.
Related Topics and Links
An airline ticket is a document or electronic record, issued by an airline or a travel agency, that confirms that an individual is entitled to a seat on a flight on an aircraft.
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On average 123,000 people travel to or from Schiphol Airport every day. These people usually do not live or work at Schiphol, but come and go by car or public transportation. The wish of Schiphol Airport to be more easily accessible has no limits. For example, Schiphol’s former CEO Jos Nijhuis said in 2016 that, as far as he is concerned, the municipality of Amsterdam could not just use the dividend Schiphol distributes every year (around €23 million) as they see fit. According to him, the dividend should go straight to improving the accessibility of the airport because “I know exactly how things go with government money: it goes into the treasury and is then used to pay for random expenses.” Schiphol has long wanted to connect to Amsterdam via a metro, for example.