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* Support sought for core routes
* Budget carriers less likely to benefit
By Laurence Frost
PARIS, April 10 (Reuters) - Major airlines are seeking
operating subsidies for key routes once coronavirus restrictions
are lifted, a leaked lobbying document shows, stoking tensions
with some low-cost carriers that are less likely to benefit from
the additional funds.
Route subsidies feature on a list of financial support
requests circulated among airline members of the International
Air Transport Association (IATA) and seen by Reuters.
"Airlines will need support to maintain their networks,
which play a critical role in driving the world's economy,"
Geneva-based IATA states in the 12-page digest of "key messages"
for airline public affairs executives to take to governments.
The support can be offered "either through a rebate on
landing charges per flight or via a direct subsidy per available
seat kilometre until markets have been stabilised", it adds.
IATA spokesman Chris Goater confirmed the authenticity of
the document, which was first reported by Unearthed, an
environmental news service funded by campaign group Greenpeace.
"It's a private document for our members," Goater said.
Operating subsidies would add to tax breaks, charge
deferrals, loan guarantees and other forms of government support
given to airlines crippled by an unprecedented near-total
shutdown of air travel in the face of the global pandemic.
But they may also strain industry efforts to present a
united front amid growing dissent over aid and its effects on
competition. Ryanair's Lauda unit publicly urged Vienna
on Thursday to withhold financial support from Lufthansa-owned
Austrian Airlines.
"Not all airlines (are) in support of this initiative," the
IATA document states, noting a "high risk of discrimination if
only applied in certain markets". It did not identify carriers
seeking or opposing route support.
British Airways parent IAG and Air France-KLM
declined to comment on the proposal. Germany's
Lufthansa did not respond to requests for comment.
CORE ROUTES
Subsidies have long existed on low-traffic routes offering
economic lifelines to regions with few other transport links.
But IATA, which represents 290 airlines, wants support to
help to restore services on some of the bigger international
connections during what may be a slow and difficult recovery.
Even after restrictions end, airlines could face further
losses, hit by weak demand, intense fare competition and limits
to passenger numbers designed to keep the coronavirus at bay.
"It's only core routes that a government would probably
consider supporting at this stage," IATA's Goater said. "They're
not going to be looking at marginal tourism routes."
The emphasis on economically important connections favours
so-called flag carriers over budget rivals such as Ryanair,
which fly more leisure passengers to and from secondary
airports.
"Under EU law, any grant of state aid must respect the
principle of equal treatment." a Ryanair spokeswoman said when
asked about the call for route subsidies.
"We are in contact with the European Commission to ensure
that it remains vigilant and blocks any aid measures that favour
'national' airlines."
EasyJet, which operates no-frills flights from major
airports, said that route subsidies "may be needed to encourage
faster restarts" when its services resume.
"But we must ensure there is a level playing field, so any
support should be equally applied and should not distort market
competition," a company spokeswoman said.
The coronavirus fallout could make some flights financially
unviable long after they are allowed to resume, IATA says.
"If a government wants a particular route to be running
because it's strategically important, then temporary funds or
support may be required," Goater said.
"It's part of our ask to governments, but it's not our
number one ask."
(Reporting by Laurence Frost
Editing by David Goodman)
