The European Union is miles ahead of the United States in making airlines pay for their pollution, proposing all sorts of taxes, fees and a carbon trading scheme to curb emissions. Airbus and the European carriers absolutely hate it and haven't been afraid to say so. Their objections have largely been ignored, so they're starting to issue threats.
Emirates has been making the most noise. It recently told delegates at an emissions trading summit in London it would be forced to throttle back its expansion into Europe and may cut routes should the EU insist on including commercial air travel in its Emissions Trading Scheme (ETS). Low-cost carrier Ryanair and others warn that putting the screws to their industry could have "devastating" effects on regional airports and "devastate" tourism.
ETS would force polluters to pay for excessive emissions by purchasing credits from cleaner companies. Backers of the proposal say it would add just a few Euros to the cost of an airline ticket. Not so, says Andre Parker, head of public and environmental affairs at Emirates.
"All our modeling shows that on a typical flight from Dubai on our most popular routes to
Paris, Frankfurt, and London, the price we would have to pass will be 10 times that amount, closer to 30 Euros," or about $38, he told GreenAir Online.
Passing those costs on to consumers will be tough because most passengers don't understand emissions trading or why they should have to pay for it. They'll simply think the airlines are gouging them.
Should the EU adopt the carbon trading scheme, Parker says Emirates may have to scale back or eliminate new routes and cut the frequency of flights on existing ones. That might sound like an empty threat, but the company's slightly unconventional business model makes it feasible. Rather than focus on routes to major cities, Emirates offers nonstop flights between Dubai and secondary markets like Glasgow, and Birmingham. The economics on these "thin" are such that cutting them is a viable option.
And that, Parker says, could place regional airports at risk of seeing airlines abandon them. Ryanair makes the same argument in denouncing an increase in the passenger air duty -- or so-called environmental tax -- the U.K adds to every ticket. The airline says that it currently picks up the £10 (about $14.80) tax levied on every ticket but will stop doing so when the tax increases next year. Instead, it says it will "enter into discussions with regional airports about the future viability of passenger traffic and growth in light of this increased cost."
"Our greatest concern is the devastation this regressive tax will have on our regional bases, which we have grown due to Ryanair's commitment to lowering fares," Michael O'Leary, the carrier's CEO, said in a statement. "The government is insane if it thinks these price sensitive passengers will continue to travel if faced with increased costs."
Airlines warn that if the EU continues pushing to include aviation into ETS, the results could be much more than a few routes cut here and there. Parker has warned the Europeans that if they push too hard they will only end up hurting themselves, telling them to "tread very carefully in difficult times."
Photo by Emirates.
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