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green airline bailouts

8 May 2020

Aviation has been one of the sectors hit hardest by the coronavirus lockdowns. Brian O’Callaghan and Cameron Hepburn from the argue that any government bailout must be conditional on meeting climate targets in Environment Journal.

The uncertainty of COVID-19 and a pandemic-induced recession of unknown duration means the short-term bankruptcy risk for many airlines is at a high. It is becoming increasingly difficult for airlines to source finance through traditional private debt and equity pathways. Many countries will do all they can to prevent the failure of a major airline, viewing mobility,  jobs and a competitive aerospace sector as essential. 


However, airline bailouts are an inefficient use of taxpayer money at a time when fiscal stimulus is much needed. We have the opportunity to ask much more of the industry in the medium and long term – nothing less than a collective net zero target. This is not a far fetched goal as several airlines have already committed to reaching it by 2050, through alternative power, efficiency opportunities and direct carbon offsets.


The impacts of COVID-19 on aviation are only just beginning to be felt. Governments should use bailouts to encourage innovation and get something for all of us, and the climate, in return.

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