Airlines Fleece Passengers for Non-existent Carbon Payments
Last year the EU Commission headed off a major trade dispute by delaying the inclusion of some flights in the European Emissions Trading Scheme (ETS).
The aviation sector celebrated, as did many consumers and business travellers as the inclusion of aviation in the ETS was credited with increasing airline ticket prices. Some predictions suggested ETS compliance would add £80 to a family holiday to the US.
So what has happened to this additional revenue now that the system has been postponed? You’ve been on your holiday, paid your surcharge….what happened to your payment for the pollution caused?
The airlines have simply trousered the cash!
As a result, air carriers will generate up to an estimated €1.3bn in windfall profits in 2012 alone, a new study by independent consultancy CE Delft has revealed. EU airlines would take the lion’s share (€758m) of these extra gains, which is almost twice their estimated €400m profits for 2011.
The study shows that airlines are passing on the full costs of allowances for compliance with the EU ETS, despite the fact that
(i) 85% of the allowance were issued for free, and
(ii) the application of the scheme to flights coming in and out of the EU has been postponed.
Congratulations to Transport & Environment for commissioning this work. Their request that the aviation sector should use this additional revenue to make a donation to the UN Green Climate Fund is an excellent idea.
I would suggest that a better solution would be for the aviation sector to buy UN offsets (as I suggest in my blog) with this windfall which could be cancelled immediately. By doing so they would be assisting the long-term carbon market, as well as offsetting much of the environmental impact of their industry in 2012.
The aviation industry wants to be seen as a progressive, sustainable sector which values customer satisfaction and loyalty.
To do so, the beneficiaries of this windfall should stop fleecing passengers and use this opportunity to create a positive environmental outcome.