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Comment by et2o | Hacker News Reader

What makes it unfair? Just curious. Is it subsidized in some fashion that trains are not?

In most EU states, there are VAT exemptions for the fuel used in domestic and intra-EU flights, while no similar exemptions exist for the fuel used in trains (and cars). Likewise, there exist VAT exemptions for plane tickets.

At least in Portugal, querosene is also exempt from the ISP (tax on the petroleum products). VAT and ISP make up more than half of the retail price of diesel and is almost 2/3 of the price of gasoline. Interestingly, the VAT rate of 23% is applied to the price with ISP included. So you effectively pay a tax on the tax. Finally, there's the fact that we're emitting free 2009/29/EC directive carbon allowances for aviation.

Portugal has a huge tax on petroleum products compared to other EU countries anyway. We paid 1.75€ per liter of gas last summer.

If they did't extempt kerosene, Spain would get its share of its tourists.

Here in the Netherlands 1 liter of gasoline was very low a few months ago at about €1,55. Now back up to €1,60 if you do your best or €1,78 on the highways. Portugal is not that bad :)

Compared: https://autotraveler.ru/en/spravka/fuel-price-in-europe.html

They really need to end these tax exemptions for planes. It makes no sense at all. But old treaties can be hard to end.

Actually, international train tickets are also VAT-exempt in many countries.

I remember reading that EasyJet and Ryanair get subsidies from regional Airport authorities. They also regularly threaten to shut down their bases at said airports when they don’t get their way with pilot unions and so on.

Then you read something construed.

It's an informal subsidy at best in that local policymakers create these regional Airports in the first place, then struggle to find Airlines without large numbers of existing traffic. So they reach out to the likes of EasyJet and Ryanair, which are happy to book slots if the price is cheap enough. Their added volumes of traffic alone can make up for other costs an airport incurs (operations etc.) in that they can rent retail space for example. And it's a chance at attracting other carriers as well.

Every shopping mall (or new district) works the same way: Without anchor tenants (who attract large amounts of traffic) it's hard to get the venue off the ground. Which is why these anchor-tenants get huge discounts (for instance in German inner-city locations an ALDI gets to pay 3€/sqm, whilst the hair salon next door pays 20€/sqm).

The question of course is: Do these regions need Airports? Or is it morally flawed for urbanites to condemn flyover-people wanting to become better connected?

If an airline is using an airport cheaply and said airport continuously requires government money to not go bankrupt, that is a fairly clear subsidy. The "rent retail space and chance at attracting other carriers" doesn't work that reliably in practice, since those other carriers can play the same game of "we only come if we don't have to pay the actual costs", and can quickly shift to other airports if one stops playing ball. Sometimes it seems attracting airplane maintenance facilities is the most reliable source of income for such airports.

Especially since in many areas, long-distance air travel is pretty much a zero sum game: more small airports doesn't mean more people flying, it's just shifting people around between airports.

In truly remote areas I believe that's different and worth supporting (paying for infrastructure so people can travel more easily, when it'd otherwise be a day or two in the car to get to an airport), but e.g. in Germany there's a bunch of places that have good train connections to bigger airports, but regional airports with extremely limited air connections are still funded. E.g. one example I'm thinking of is less than 2 hours by train from 2 big airports, but apparently needs an airport that serves a few holiday flights each week. Every few years there's big announcements of new airlines coming in, which either get cancelled again after a few years, the airline goes bankrupt or ... While the running subsidies aren't that high, the initial investments were and IMHO would have been better used for other infrastructure.

"If an airline is using an airport cheaply and said airport continuously requires government money to not go bankrupt, that is a fairly clear subsidy."

Yes. But based on EU regulation this won't be allowed anymore in the near future. (2020? 2022?)

Depends on what externalities you count in. Is not taxing fossil fuel a subsidy?

I believe fossil fuel is taxed pretty highly in all European countries, let alone Sweden?

Not highly enough to account for its externalities.

Importantly, petroleum taxes are usually leveraged on consumers e.g. diesel and gas prices in europe are mostly special taxes (+ VAT), train operators pay taxes on electricity (possibly diesel as well, not sure about that one) but kerosene (and possibly bunker fuel) is free of both VAT and petroleum-specific taxes. And that's despite planes generally producing more CO2/passenger/km than cars by a factor of 30~50%.

Sadly, aviation is often exempt from fuel taxes and even VAT. I don't know the situation in Sweden, it seems they started taxing aviation recently. I don't know how much though.

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