Hundreds of millions left for KLM: will it never end? – Joop

26-05-2022

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© cc-photo: Marco Oetjen

“If you want to be a millionaire, you have to start with a billion dollars and start an airline,” says Richard Branson, founder of Virgin Atlantic. There is a certain security in aviation: more money is always needed. That money rarely comes from an eccentric billionaire. In most cases, it is the taxpayer who is going to withdraw the wallet.

Just a few months after it was founded in 1919, KLM stopped cooperating with the Dutch government. A century later, the company, now merged with Air France, still cannot do without state aid. Due to the pandemic, the airline received 7 billion euros from the French government in recent years, while Dutch aid, according to NRC calculations, amounted to 6.5 billion euros

These amounts are in addition to the indirect subsidies that the airlines receive by default. For example, KLM does not have to pay VAT on the tickets, and the company is also exempt from paying excise duties on petroleum. In 2018, Aviation Economics estimated that the Dutch state is missing out on 2 billion euros annually as a result.

Sometimes objections are made to the use of state money to keep plane tickets cheap – the climate activists from the Extinction Rebellion took the floor of the Ministry of Finance on Monday in protest of all state subsidies to the fossil fuel industry – but that does not make much of an impression.

Aviation has many political supporters. Daniel Koerhuis, of course, who sings ‘fly, fly’ at least six times a day, but also more serious politicians, such as turned a blind eye when the unnecessary shops at Schiphol were initially kept open during the last year. lockdown, while they were elsewhere, had to close at.

The main allies of KLM and Schiphol have traditionally been members of the Cabinet. Political color makes no difference. For example, the first Kok cabinet defended the expansion of Schiphol Airport in the 1990s by saying that the Netherlands should not become “Europe’s Jutland” anyway – a concept that I once tried in vain to explain to a couple of Danes.

On Tuesday, Sigrid Kaag announced that she is allocating more than 200 million euros for the purchase of AirFrance-KLM shares. Her predecessor Wopke Hoekstra already deposited 744 million euros in February 2019 for an interest in the airline. At the time, he paid 12.35 euros per. Investors have now lost only a fraction of that: On Thursday, you only had to pay 1.64 euros for a stake in AirFrance-KLM. If only Hoekstra had listened to Richard Branson, you tend to think like a simple citizen who can pay for the aviation dreams of successive cabinets.

The several hundred million euros that have gone up in smoke will probably not interest Hoekstra much. Three years ago, the CDA member mainly bought influence from the company, where the French simply play first violin. The government wants at all costs to prevent AirFrance-KLM flights, which are currently going to Schiphol, from being transferred to Charles de Gaulle or Orly.

Anyone who has seen the queues at the national airport in recent weeks might think that it would not be such a disaster if it became a little less crowded. And if you like to build, build, build, it probably would not hurt to reduce the number of flights – which saves a lot of nitrogen emissions and noise pollution. There are still some arguments – climate anyone? – to find out why it is unwise to pour another bucket of tax money into this bottomless pit.

However, the chance that the government will ignore this seems zero. Once you have invested in something (money or time), you tend to stick to it. Even if it turns out that it was not a wise investment at all. Therefore, people stay in the cinema after a bad movie, and cities diligently build on metro lines that are much more expensive than budgeted. Psychologists talk about the delay in cost overruns or the Concorde effect. Actually named after a plane that never became profitable.

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