§ 16. Mr. MansTo ask the Secretary of State for Transport what steps he is taking to ensure that further state subsidies are not provided by EU Governments to their state airlines [659]
§ Sir George YoungThe UK opposes subsidies which distort competition in aviation. We shall continue to press the European Commission to take tough action in line with the treaty rules on state aid.
§ Mr. MansDoes my right hon. Friend agree that it makes no economic sense for subsidies provided by the Spanish and French Governments to be used simply to cut fares on specific routes to gain turnover rather than to turn subsidised monopolies into profit-making organisations, which is the intention with Air France? Does he agree that that has to stop, in the interests of all air travellers across Europe and particularly of companies, such as British Airways, which are already in the private sector and operating profitably?
§ Sir George YoungMy hon. Friend is right. State aid shores up the inefficient airlines. The Government have made their position clear: we oppose any further aid to Iberia. State aid to Air France amounting to £2.4 billion seriously distorts competition. The right answer for those countries is to do what we have done and privatise their airlines.