Airlines reject the deal of the century

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Source: Transport and Environment (T&E)

T&E's Bill Hemmings writes in today's Financial Times on behalf of the International Coalition for Sustainable Aviation (ICSA):

Sir, Jeff Smisek, chief executive of the newly merged United and Continental Airlines, balks at the thought of paying his share of the estimated €1.1bn cost of the aviation sector joining the European Union’s emissions trading scheme from next year (“United warns EU on carbon rule”, April 4).

Let’s do a quick sum. If you divide €1.1bn by the 90bn litres of kerosene that fall under the scheme, you get 1.2 cents a litre. That is 40 times less per litre than the 48 cents tax road transport pays, on average, for petrol and diesel in the EU. As aviation currently pays no fuel tax, no value added tax on tickets and nothing for its climate impact (which is 5 per cent of the global total according to the latest science, not the 1-2 per cent figure the FT quoted), the sector is getting the deal of the century. But amazingly, Mr Smisek wants an even better one and is willing (along with other US, and Chinese airlines) to go to court to get it.

In an age when governments everywhere are in need of new sources of revenue, Mr Smisek might reconsider whether drawing further attention to his industry’s massive tax subsidy is such a smart plan.

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