France Takes Aim at Low-Cost Carriers With Ban on Short Routes

by Bloomberg Jun 22, 2020

France plans to ban commercial air travel on the country’s shortest domestic routes in a bid to prevent low-cost carriers picking up links Air France is being forced to abandon as part of the terms of a bailout package.

“If we are asking things of Air France, it’s not so that low-cost companies can come along and start their own service,” French Environment Minister Elisabeth Borne said Monday on RMC radio. Ryanair Holdings Plc and EasyJet Plc already operate services in France.

The minister’s comments highlight the potential ripple effects of environmental strings attached to the bailout of Air France-KLM, which could reshape domestic air travel. The policies would put France in the same camp as Austria, which has also placed constraints on short-haul air travel as part of a state-funding plan for the local unit of Deutsche Lufthansa AG.

“We have asked Air France to accelerate its environmental transition,” Borne said, adding that this includes a “drastic reduction” in the number of flights where there is an alternative rail link of less than 2 1/2 hours.

Air France-KLM received 7 billion euros ($7.9 billion) in loans and guarantees from the French government in exchange for agreeing to curb domestic flights by 40%. While this would include pulling some short-haul flights that operate through Orly airport, the company is expected to be able to keep services through its Paris-Charles de Gaulle hub that feed into long-haul destinations.

Citing figures from the Climate Action Network, Greenpeace France has said the measures aren’t ambitious enough because they would cut carbon emissions by just 6.6%.

Borne said she favors following Austria, which has proposed imposing rules on plane-ticket prices, calling 1-euro and even 15-euro tickets “shocking” and saying she backs “in principle” minimum prices.

Austria will impose an additional ticket fee of 30 euros for short-haul flights below 350 kilometers and has said prices can’t be below taxes and fees, with a minimum price of about 40 euros.