The Greek government envisages support measures for air carriers of approximately 115 million euros, given the systemic importance of aviation for the economy, the joint statement of the three ministries says – finance, labor, and social security, as well as infrastructure and transport.
The industry is directly connected with tourism and indirectly with several other sectors of the economy (catering, entertainment, and trade in tourist areas, island farming), and needs special support.
“The air transportation sector concerns 306 companies and 11 thousand employees, and its systemic significance is that 82-85% of the country’s tourist revenues (total income of 18 billion euros per year) are for tourists who fly to our country by air and use the services airports, “the report said.
Greek companies in this sector (aviation, ground handling companies, airports) have performed very well in recent years due to the large number of tourists arriving and income, and they do not need huge amounts of support or direct investments (capital injections), as in other European countries, they say in the government.
Besides, the country begins to accept tourists from abroad on June 15, and the arrival of tourists will positively affect flight operations and airports.
As part of its support for the aviation industry, the government is extending horizontal support measures for transport beyond May 2020. In particular, compensation until July will be received by employees whose employment contracts are temporarily suspended.
A 40% reduction in the cost of rent for enterprises and for employees with whom the execution of labor contracts is temporarily suspended after May is envisaged by August.
It is estimated that compensation for aviation workers will cost about 22 million euros, given the coverage of insurance premiums by the state. A subsidy is provided for all insurance contributions (employers and workers) for the working period when employees did not work, this is estimated at 50 million euros until December 2020.
A special tax rate for flight crews — pilots, crew members, and technicians — is introduced at a rate of 15%, as well as for taxation of seafarers. This will lead to lower salary costs for companies in the industry, with savings of 7.7 million euros per year. “This is a permanent measure,” the report says.
Also, compensation for flights in April-May of 6 million euros is provided.
The government also reduces VAT on transport from 24% to 13% between June 1 and October 31, 2020. “This will have a positive effect on air transport. The loss of state revenues from this measure is estimated taking into account the special conditions prevailing during the current period of 30 million euros,” the statement said.
Ministries note that the aviation sector also has access, like all other sectors of the economy, to the liquidity instruments that have been offered to businesses since the onset of the coronavirus crisis.
Greece has suspended flights since the end of March. From May 18, a part of domestic flights was resumed, from May 25 flights to all domestic destinations began to be operated.