Europe’s Economy Faces Big Hit from Green Limits on Bizav
EBAA and GAMA say new report shows true costs of environmental restrictions
EBAA and GAMA have warned that new restrictions on business aircraft operations could impact the economic contribution made by the industry in Europe at locations such as Paris Le Bourget Airport. © Luxaviation

Multiple government policies aimed at restricting business aviation activity could cost Europe up to €120 billion ($125 billion) in foreign direct investment (FDI) and 104,000 jobs, according to a new study commissioned by the General Aviation Manufacturers Association (GAMA) and the European Business Aviation Association (EBAA).

Published on Wednesday, the report by Oxford Economics concluded that the industry currently contributes around €100 billion to the European Union’s GDP each year but is threatened by efforts to cut aviation carbon emissions that the industry groups have said are misguided and will undermine competitiveness.

EBAA and GAMA said they do not refute the need to address business aviation’s environmental impact, but they argued that the primary focus should be on collaborative industry-led efforts based largely on innovation rather than restrictions. The report, entitled “The Socio-economic Benefits of Business Aviation in Europe,” highlighted potential harmful proposals from EU regulators including caps on short-haul flights (also including scheduled air services) and slot restrictions on business aircraft at some airports.

“Targeting business aviation with restrictions and unfair regulatory burdens, like the exclusion from the EU Taxonomy framework, risks €120 billion in FDI and thousands of jobs by 2030,” said EBAA’s secretary-general, Holger Krahmer. “We should move away from the ban mentality and focus on policies that support innovation, decarbonization, and competitiveness.”

According to the Oxford Economics research team, countries such as Germany, Italy, and Poland stand to pay the highest price in terms of job losses for policies that suppress the benefits of business aviation because they have relatively high levels of employment by foreign-controlled entities (FCEs). The report estimated the potential loss of jobs at between 57,000 and 104,000 based on projected cuts in FDI of between €76 billion and €120 billion.

In fact, Oxford Economics said the impact of restrictive policies could be far greater. Its study focused solely on the impact of cutbacks in FDIs and FCE activity. It warned that negative impacts from regulatory restrictions on business aviation could have “devastating impacts” on the sector’s core economic activities, such as direct investments and employment.

Previous research has estimated that the business aviation industry employs around 94,000 people in Europe and directly contributes €44 billion to the continent’s GDP. Through supply-chain purchases and spending from employees’ wages, another €55 billion goes towards overall GDP.

Bizav Calls for Innovation, Not Restrictions

In response to the report, EBAA and GAMA repeated their calls for increased use of sustainable aviation fuel to be the bedrock of efforts to cut emissions, rather than policy initiatives to restrict flights. Based on around 400,000 business aircraft departing 1,100 European airports each year and flying an average of 800 kilometers (432 nm), the groups have estimated that within the EU, the sector still accounts for just 0.8% of all aviation industry carbon dioxide emissions.

EBAA and Dassault Aviation are jointly taking legal action against the European Commission over its exclusion of business aviation from the provisions of the Taxonomy Delegation Act. Their legal team is arguing that the exclusion is discriminatory and undermines the industry’s efforts to access financing to support sustainability initiatives, including replacing aging fleets with lower-emission new-generation aircraft.

“Often perceived as a luxury, business aviation plays a crucial role in economic development,” said Carlos Brana, Dassault Aviation’s executive vice president for civil aircraft. “We’ve seen firsthand how it fosters growth in the regions it connects, from creating jobs in remote areas to attracting investment and reducing travel time.”

EBAA also pointed out that business aircraft make a vital contribution to emergency medical support. In 2023, the group estimated that there were at least 70,000 medical flights operated by companies in the sector, equating to an average of more than 191 flights each day.

German Security Charges Bite

Meanwhile, operators in Europe have been reporting increased costs from the enforcement of regulations, including new security requirements. For example, Germany’s LBA civil aviation authority started doing spot checks last year to test whether individual operators were maintaining adequate security measures. According to data provided by operators to the OpsGroup platform, operators have faced unexpected bills for these checks of between €100 and €330.

According to Andreas Mundsinger, managing director of the German Business Aviation Association, this practice is proving to be “a major hassle for all operators.” The group has challenged the basis for the LBA to be charging for the enforcement of European Union security regulations that are not subject to direct fees in other member states. According to the agency, the charges now being made were approved under German legislation that came into effect on Feb. 1, 2024.