POLICY BRIEF

POLICY BRIEF SEPTEMBER 2022

politikbrief.lufthansagroup.com/en

Mask obligation on board

Germany’s unjustifiable special path 1

EU Climate Policy

Will policymakers finally walk the talk? 2

Consumer protection in aviation

Overview of refunds and compensation payments 4

Data Act

EU wants to promote the use and fair exchange of industrial data 6

Sustainability

Climate targets validated | New fare for CO

-neutral flying | MoU with Shell 8

Contact

Your Point of Contact at the Lufthansa Group 9

September

2022

POLICY BRIEF SEPTEMBER 2022

Page 1

Mask obligation on board

GERMANY’S UNJUSTIFIABLE

SPECIAL PATH

On August 24, the German government presented its draft for the revised Infection Protection Act

(IfSG). According to the draft law, the mandatory mask requirement on airplanes is not only to be

continued, but tightened. This would cement Germany’s special path – without any plausible reason.

The Bundestag and Bundesrat must urgently ensure improvements in the further legislative process.

Under the federal government’s plans, passengers on board

aircraft taking off or landing in Germany will still have to wear

masks. However, only FFP2 masks are to be permitted in the

future. Previously, travelers could also use surgical masks.

This means a significant tightening.

Special regulation not justifiable

Whether in the subway, on the bus, in clubs or concert halls –

the German government has decided against a uniform

regulation on the wearing of masks. Only in airplanes and on

long-distance rail services is a special regulation to apply.

There is no scientific justification for this. On the contrary, the

Robert Koch Institute (RKI) sees no increased risk of infection

on board aircraft. The EU air safety and health authorities

EASA and ECDC have been waiving mandatory mask

requirements since May - and the vast majority of countries

are acting accordingly.

International isolation – a misguided development

Our neighboring countries, Great Britain, the USA: they

have all long since dropped the requirement to wear masks

on board. The list goes on and on. For German airlines, this

results in a massive competitive disadvantage. Passengers

who have the choice of flying for several hours with or

without a mask usually opt for the more comfortable option.

It is true that the mask requirement formally applies to all

airlines flying to or from Germany. However, it is not a secret

that airlines from countries where masks are not mandatory

hardly apply the regulation at all.

Travelers’ understanding wanes

The German mask requirement has long since lost the

acceptance of many passengers and leads to conflicts at the

expense of employees. This applies all the more to a German

go-it-alone in favor of the FFP2 mask. We must now focus on

personal responsibility and voluntary action. In airplanes, the

air is cleaned by high-efficiency filters (HEPA). In this respect,

it is difficult to understand why stricter rules should apply

here than in other areas of life.

Good policy is reasonable and does not neglect the

comprehensibility of legal requirements. The IfSG draft

fundamentally contradicts these premises: compliance with

mandatory masks provokes resistance among air travelers and

places a considerable burden on our crews. A mandatory FFP2

mask would further increase the competitive disadvantage for

domestic airlines. A revision is urgently needed.

Fresh air Fresh air

Expelled air

Cabin

HEPA

filter

Clean cabin air

“The risk of infection is extremely low. This is also related to

the air filtration systems in airplanes, which are exorbitantly

better than in all other modes of transport. They filter out

more than 99 percent of germs.”

René Gottschalk, Head of the Frankfurt Health Department

High efficiency (HEPA) filters ensure clean cabin air

Every 2 to 3 minutes all the air in the cabin is renewed.

Source: BDL

POLICY BRIEF SEPTEMBER 2022

Page 2

EU Climate Policy

WILL POLICYMAKERS FINALLY

WALK THE TALK?

For more than a year, Brussels has been negotiating the “Fit for 55” package. In terms of aviation,

concepts for fair competition with non-European competitors and against carbon leakage are still

missing. The upcoming trilogue negotiations will show how serious European and German politicians

are about not disadvantaging domestic airlines and risking jobs.

When she presented the European Green Deal in December

2019, the president of the European Commission Ursula von

der Leyen said: “The European Green Deal is on the one hand

about cutting emissions, but on the other hand it is about

creating jobs and boosting innovation.” She added that this

project “is very ambitious, but it will also be very careful in

assessing the impact and every single step we are taking.”

As far as aviation and the “Fit for 55” package are concerned,

reality is far from the claims made by the president of the

European Commission. In particular, adequate solutions to

carbon leakage and distortion of competition are still missing.

Similarly, on a national level, the German coalition agreement

states: “Our goal is to create a fair framework in international

competition for effective climate protection in air transport”.

This announcement is correct. But it must lead to tangible

policy. If the German government and other EU member

states want to live up to self-imposed claims, they have to

get the “Fit for 55” plans for air transport corrected. The

current proposals would create massive competitive

disadvantages for European network airlines and hubs.

Airlines and hubs on the Bosporus and Persian Gulf

would benefit.

Two dossiers in particular need to be improved: “ReFuelEU

Aviation” to introduce a blending mandate for sustainable

aviation fuels (SAF) and the reform of the Emissions Trading

Scheme (ETS).

SAF mandate unilaterally burdens European aviation

A SAF mandate can boost demand and thus the so far low

production of green kerosene. However, fuel costs rise

considerably due to the significantly more expensive SAF. For

the greatest possible climate protection effect and balanced

competition, the mandate must be redesigned: It should not

unilaterally affect EU airlines, but also take adequate account

of non-EU carriers. However, the planned SAF mandate

+20

+17

+16

Madrid

Frankfurt

Amsterdam

Doha

Dubai

Istanbul

“Fit for 55” results in a significant burden on Europe’s hubs

Development of air ticket prices via individual hubs

Source: SEO Amsterdam Economics, 2022; Scenario 2030

should only apply to departures from the EU. This would

make flight connections via European hubs significantly more

expensive. The ticket price increase for journeys via Istanbul

or Dubai, on the other hand, would be marginal because no

SAF costs would be incurred when transferring at these hubs.

This imbalance must be corrected.

Implement ETS reform in a competition-neutral way

In principle, the ETS is an effective climate protection

instrument because it prices, limits, and reduces CO

However, as it only applies to flights within the EU, it is a

disadvantage for European network airlines and airports

in intercontinental transfer traffic. This is because feeder

flights via EU hubs are subject to the ETS, whereas transfer

connections via non-European hubs are not. Thus, the ETS

reform should include an urgently needed correction of this

distortion of competition. Instead, the European Parliament

is even arguing for a tightening by extending the ETS scope

to all departures in the EU. This would mean that EU airlines

would buy ETS allowances for the entire journey, i.e. for

the short feeder flight within the EU and the long-haul. In

contrast, airlines with a transfer flight via a non-EU hub (e.g.

Istanbul, Doha, Dubai) save themselves the purchase of

allowances for the long and particularly expensive part of

the route.

Already without the extension of the scope, transfer traffic

will be heavily shifted to non-EU hubs. Consequently,

130,000 to 260,000 jobs would be at risk, as a recently

presented study shows*. With an extension to all departures

in the EU, the effects would be further exacerbated.

Extend SAF Allowances

To reduce the costs of SAF, the EU Parliament and Council

have proposed the so-called “SAF Allowances”. The idea

implies that airlines would receive a certain amount of ETS

certificates when refuelling with the expensive SAF. In this

way, the cost disadvantage for EU airlines could be mitigated

a bit. However, the necessary level playing field with airlines

outside the EU is not fully achieved. Due to the sharply

increasing SAF mandate after 2030 and the decreasing

number of ETS allowances, this model can be a first step,

but not a permanent solution. In the long term, another,

adequate compensation mechanism must be found. In the

trialogue, it is now important to design the SAF Allowances in

such a way that they compensate for the additional SAF costs

between EU and non-EU airlines until a fundamental new

regulation is in place.

The success of the planned climate protection measures for

air transport will be measured by whether it is still possible to

catch this industrial policy boomerang. Currently, there is a

danger that connectivity and value creation in Europe will be

lost - in favour of companies in autocratically governed states.

Europe must not become dependent on third countries for its

transport policy.

Transfer

Frankfurt:

Departure:

Hamburg

Transfer

Istanbul:

Destination:

Bangkok

Passenger development

via non-EU hubs

+24

Passenger development

via EU hubs

-15

+99

€

+19

€

Source: SEO Amsterdam Economics, 2022; Scenario 2035

* SEO Amsterdam Economics: Aviation “Fit for 55” – Ticket prices, demand and carbon leakage, March 2022

Development of passenger flows as a result of “Fit for 55”.

Example Hamburg - Bangkok in 2035: The “Fit for 55” program increases ticket prices via Frankfurt by around 100 euros.

Transferring in Istanbul, the “Fit for 55” additional costs amount to only one fifth. Overall, demand at EU hubs is expected to

decline by 15 percent, while demand via non-EU hubs will grow by more than 24 percent.

POLICY BRIEF SEPTEMBER 2022

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Consumer protection in aviation

OVERVIEW OF REFUNDS AND

COMPENSATION PAYMENTS

Capacity and staff shortages, an excessive sickness rate and a simultaneous unexpected high

demand led to flight cancellations and delays across Europe and the world, this summer. This has

caused a revival of the discussion on air passenger rights. However, is there a need for political action?

The basis of consumer protection in European air transport

is EU Regulation on air passenger rights (Regulation

261/2004). This Regulation distinguishes between the

right to reimbursement on the one hand and the right to

compensation on the other.

1. Reimbursement: Lufthansa ensures punctual payment

of refunds

In case of denied boarding, a flight cancellation or a delay of

at least five hours, passengers are offered a choice between

a reimbursement of the full cost of the ticket and re-routing.

Airlines are legally obliged to reimburse passengers within

seven days. Despite the significant number of changes

in flight schedules, Lufthansa has ensured that almost all

refunds were paid within one week.

For this reason, the recent calls in some member states to

abolish the practice of advance payment for flight bookings

are unfounded. This current practice – where consumers

have to pay the full airfare at the moment of booking – is also

common in other services industries. However, this is usually

without such strict reimbursement deadlines. Rail transport

and the event industry are only two examples.

Maintain the practice of advance payment in air transport

A ban on advance payment in air transport would not be

effective, since it benefits both passengers and airlines. While

the airlines gain planning security to utilize capacities in an

optimized economic and ecological way, customers benefit

from early booking fares.

These fares, which are particularly important for leisure

travelers, can only be offered due to advance payment. In

fact, passengers already have a choice today: if they want to

avoid paying a long time in advance of their departure, they

can simply book their flight at short notice. Advance payment

for flight bookings has significant benefit; a ban would be

counterproductive.

2. Compensation: A need for political action at EU-level

Regardless of the right to reimbursement, passengers

are under certain conditions also entitled to receive a

compensation between 250 and 600 Euros – depending

on the distance of their flight. This is applied, provided

there are no “extraordinary circumstances”, such as a

medical emergency or a thunderstorm. Airlines should only

compensate passengers in case a particular flight irregularity

was caused by a circumstance within the control of an airline.

However, “extraordinary circumstances” are not defined in

Regulation 261/2004. The legal base is unclear to passengers

whereas airlines lack clear criteria. Long waiting times for

passengers to receive compensation and court proceedings

are the result of this lack of a binding, non-exhaustive list of

“extraordinary circumstances”. With 175 proceedings before

the Court of Justice of the European Union (CJEU), this

Regulation is one of the most controversial pieces of EU-

legislation.

The rulings of the CJEU have questionably substituted the

role of European legislators. For example, the obligation

for airlines to compensate passengers in case of a strike is

disproportionate and should be rejected outright. Therefore,

a clear need for political action exists at EU level in order

to improve legal certainty for all stakeholders involved. The

introduction of a binding, non-exhaustive list clarifying

“extraordinary circumstances” is a much-needed improvement.

This would reduce the need for court proceedings, speed

up compensation payment processes, and create a more

balanced set of eligibility criteria for airlines to compensate

passengers.

Favorable

early-booking fares

Optimized

capacity utilization

Fast payment

of refunds

Benefits of advance payment for flight bookings

POLICY BRIEF SEPTEMBER 2022

Page 5

3. Automation of compensation payments: What exactly

is meant?

The German coalition agreement of 2021 expresses the

ambition to automate compensation payments for all

transport modalities. However, when verifying the

passenger’s eligibility for the right to compensation in air

transport, numerous individual factors need to be assessed.

The decisive factor is always the passenger’s specific travel

itinerary. An example: a flight from Barcelona to Frankfurt is

delayed. The final destination of one passenger is Frankfurt.

This passenger might be entitled to compensation because of

the delayed flight. The final destination of another passenger

is Singapore and this passenger only transfers in Frankfurt.

This passenger, however, still arrives on time in Singapore

because of the long transfer time in Frankfurt. As a result,

this passenger is not entitled to receive a compensation

payment. Although both passengers were on the same flight

from Barcelona to Frankfurt, both individual cases have to be

treated differently.

In addition, the legal base describes that only the passenger

is entitled to receive a compensation payment. Quite often,

however, the passenger and the person who paid the ticket

are not identical – for example in the case of a business trip.

Although airlines have the account details of the payer, they

do not have those details of the passenger itself. This clearly

shows that although the idea to automate compensation

payments might sound like a good idea, it would not be

feasible in practice. Nevertheless, at the same time it is clear

that additional processes must be further digitalized and

simplified. It is for this reason that Lufthansa works on this

goal every day. As a result, we can offer our customers more

and more self-service applications, such as refund requests

and rebooking requests via our own app or via a chat bot.

Clear legal provisions,

reimbursement

within 7 days

Reimbursement of

the full ticket price

Refunds

Compensation

Complex legal provisions,

case by case assessment,

no legal deadline to

compensate passengers

Amount of compensation

based on legal provisions

Payment deadlines and nancial amounts:

Data Act

EU WANTS TO PROMOTE

THE USE AND FAIR EXCHANGE

OF INDUSTRIAL DATA

A new legislative proposal by the EU Commission “on fair access to and use of data” offers enormous

opportunities for optimised flight operations, more innovation, and fewer emissions. The principle

is that anyone purchasing a connected device should have access to and control over the data

generated through it. The same concept is also applicable to aircraft data and is overdue. A general

reference to „business secrets“ must not be used to delay or even prevent this important project.

According to Digital Commissioner Vestager, the fundamental

plan is “to give consumers and companies even more control

over what can be done with their data.” This is also an urgent

need in air transport. After all, a Lufthansa aircraft generates

about 2.5 terabytes of data per day through its modern sensors

during operation. That corresponds to the data volume ofmore

than 600 cinematic films. So far, however, this data has not

been used by Lufthansa, but by the aircraft manufacturers.

This way, the airlines are deprived of important innovation

potential. The EU law now regulates, for the first time, who

may use industrial data under which conditions: the manu-

facturer or the user? With the Data Act, the EU Commission is

giving a precise answer: anyone who purchases a connected

device is also entitled to know the data relevant to its use.

What sounds obvious was not the case until now.

Fair data access for manufacturers AND airlines

Aircraft manufacturers control the flow of data from the

sensor via the aircraft to the ground. In order to obtain

access to the data from the manufacturer, the airlines have

to conduct laborious negotiations. As a result, aircraft

manufacturers are expanding their data monopoly and

offering exclusive services that are only available via their

platforms. This is where the Data Act is supposed to help. For

Lufthansa, this would mean in concrete terms: Access to and

control over the data that its fleet generates in operation.

More efficiency and innovation

Access to data – ideally in real time – enables airlines to

better analyse and thus optimise the life cycle and fuel

consumption of their aircraft fleets. This is important, for

example, for older components to already be identified

and maintained at an early stage by evaluating sensor data

(i.e. predictive maintenance). Example: Engines that show

unusual behaviour in relation to identical models can be

Aircraft = XXL data producers

Modern Lufthansa aircraft generate around 2.5 terabytes

of data per day. This corresponds to the data volume of

over 600 cinematic films.

2.5

600

POLICY BRIEF SEPTEMBER 2022

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POLICY BRIEF SEPTEMBER 2022

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cleaned, taken out of service, or maintained ahead of time. An

extension to other aircraft systems would further increase the

eco-efficiency of flight operations.

Moreover, the Data Act is intended to simplify the sharing of

data with third parties – including maintenance companies,

SMEs, start-ups, and universities. This would create new

business models and better competition. Both help airlines to

operate more cost-effectively and sustainably.

Currently, the EU Parliament and Council are discussing the

legislative proposal. The upcoming decisions will set the

framework for industrial data management in Europe in the

coming decades. The technological and ecological innovation

potentials are enormous, especially in air transport. Therefore,

the Commission’s proposals should be approved and

implemented quickly.

The following aspects are crucial:

 Airlines should be given access to and control over the

data generated during their flight operations and be able

to pass on their fleet data to third parties commissioned

by them. This would enable fair innovation competition for

more efficient and climate-friendly flight operations.

 Aircraft manufacturers are often concerned about

maintaining trade secrets and the associated protection

of intellectual property. The Data Act, on the other hand,

refers exclusively to the data that can be recorded and

utilized during operation. By analysing this operational

data, neither the aircraft nor individual components can

be reproduced. The arguments of the manufacturers must

therefore be viewed in a differentiated manner.

Airlines… Aircraft manufacturers...

Data generation

through sensors

on aircraft parts

...are

developing

new products.

...are

developing

new products.

...reduce

emissions.

...optimize

their

operations.

...share data

with startups,

SMEs and

academia.

Creating added value through data sharing

EU Commission proposal:

manufacturers and users share data

POLICY BRIEF SEPTEMBER 2022

Page 8

First European airline group

CLIMATE TARGETS VALIDATED

The Lufthansa Group is the first airline group in Europe to pursue scientifically based

reduction targets.

In accordance with the SBTi criteria, the Lufthansa Group

aims to reduce its CO

intensity – i.e. greenhouse gas

emissions per transported payload, be it passengers or

freight – by 30.6 percent by 2030 compared to 2019. This

corresponds to an absolute CO

reduction of 18 percent.

To complement this, the Group intends to achieve its self-

imposed target of halving net CO

emissions by 2030 through

offset measures. SBTi is a collaboration between the United

Nations Global Compact, the World Resources Institute

(WRI), CDP and the World Wide Fund for Nature (WWF). In

accordance with the SBTi criteria, the Lufthansa Group aims

to reduce its CO

intensity – i.e. greenhouse gas emissions

per transported payload, be it passengers or freight – by

30.6 percent by 2030 compared to 2019. This corresponds

to an absolute CO

reduction of 18 percent. To complement

this, the Group intends to achieve its self-imposed target of

halving net CO

emissions by 2030 through offset measures.

SBTi is a collaboration between the United Nations Global

Compact, the World Resources Institute (WRI), CDP and the

World Wide Fund for Nature (WWF).

-50 % net CO

emissions by 2030

Compensation

100 %

2019 2030

100

Reduction

Global pioneer

NEW FARE FOR

NEUTRAL FLYING

The Lufthansa Group is further expanding its CO

-neutral

flying offers and has been testing so-called Green Fares

in Scandinavia since the beginning of August: For flights

from Norway, Sweden and Denmark with the Group airlines

Lufthansa, SWISS, Austrian Airlines and Brussels Airlines,

customers can buy flight tickets that already include full CO

compensation. 80 percent of the offsetting is done through

high-quality climate protection projects and 20 percent

through the use of sustainable aviation fuels (SAF). The Green

Fare is optionally displayed in the online booking screen –

the first offer of its kind worldwide.

Sustainable aviation fuel

MOU WITH SHELL

Shell and the Lufthansa Group have signed a Memorandum of

Understanding (MoU) for exploring the supply of sustainable

aviation fuel (SAF) at airports across the globe. The airline

group plans to purchase up to 1.8 million metric tons of SAF

from Shell between 2024 and 2031. Such an agreement

would be nothing less than one of the most significant

commercial SAF cooperations in aviation. The Lufthansa

Group is already the largest customer of SAF in Europe.

Lufthansa Group

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PUBLISHED BY

Andreas Bartels

Head of Communications

Lufthansa Group

Dr. Kay Lindemann

Head of Corporate International

Relations and Government Affairs

Lufthansa Group

Martin Leutke

Head of Digital Communication

and Media Relations

Lufthansa Group

Deutsche Lufthansa AG

FRA CI, Lufthansa Aviation Center

Airportring, D-60546 Frankfurt

EDITOR IN CHIEF

Sandra Courant

Head of Political Communication

and Media Relations Berlin

Lufthansa Group

EDITORIAL STAFF

Annette Braun, Holger Kindler,

Julia Leukel, Henning Neuhaus,

Claudia Walther

PRESS DATE

5 September 2022

AGENCY PARTNERS

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DISCLAIMER

www.lufthansagroup.com/en/service/disclaimer

ANDREAS BARTELS

Head of Corporate

Communications

Lufthansa Group

+49 69 696-3659

[email protected]

MARTIN LEUTKE

Head of Digital Communication

and Media Relations

Lufthansa Group

+49 69 696-36867

[email protected]

SANDRA COURANT

Head of Political Communication

and Media Relations Berlin

Lufthansa Group

+49 30 8875-3300

sandra.couran[email protected]

DR. KAY LINDEMANN

Head of Corporate International

Relations and Government Affairs

Lufthansa Group

+49 30 8875-3030

kay[email protected]

JÖRG MEINKE

Head of EU Liaison Office

Lufthansa Group

+32 492 228141

joerg.meink[email protected]

JAN KÖRNER

Head of Government Affairs

Germany and Eastern Europe

Lufthansa Group

+49 30 8875-3212

[email protected]

POLICY BRIEF SEPTEMBER 2022

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