Thursday, January 18, 2007

UK doubles tax on air travel, Ryanair fights back

Last month, British finance minister and soon the next prime minister, Gordon Brown, announced that airfare tax would double on UK flights departing after February 1, 2007. The policy aims to reduce air travel and therefore a source of carbon pollution, a major cause of global warming.

One airline fired back. Reuters reports that Michael O'Leary, CEO of Ryanair, called the taxes "regressive and ineffective" and instead asked British policymakers to tax old, inefficient airplanes, business travelers, and travelers making connecting flights. O'Leary pointed out that his airline - Europe's largest
budget provider - flies the newest, most fuel-efficient planes and is doing its part to reduce carbon. He also argued that carbon pollution from air travel is small compared to other sources like electricity, although critics point out that the airline sectors' rapid growth rate and resulting increased emissions will make it difficult for the UK to reach its carbon reduction goals.

Airlines have been charging the tax since the announcement, but now the sticky situation has come up in the era of Internet booking. Many flights taking off after February 1, 2007 were booked before the new tax policy was announced in December 2006. So what to do when thousands of passengers show up to fly that day?

Air and Business Travel News pointed out that airlines and travel companies can hardly be expected to absorb the estimated $194 million in extra tax costs, and Ryanair has already emailed passengers asking them for the tax if they are flying after Feb 1. Those who don't want to pay the extra will have their fares refunded completely.

The tax didn't stop Prime Minister Tony Blair from flying over the holidays. Environmentalists criticized his trip, but O'Leary said Blair was "absolutely right to keep flying."

Demonizing air travelers or the airline industry is a losing strategy for energy or environmental activists. Businesses have to travel to do business, and here in the U.S. I guess we could revert to sailing across the oceans to visit other lands, but that seems pretty silly. I thought this whole mess in the Middle East was in part because cultures don't understand each other, and trying to confine people to their country isn't going to help that. Let's tackle electricity and ground transportation first, and then focus on making airplanes more efficient, rather than discouraging people from seeing the world at all.

Photo credit: Steven Pam

1 comment:

Tom Konrad said...

Taxing air travel is "regressive"!?

Is O'Leary trying to say that all the poor people aren't going to be able to fly to their jobs with this tax, or that poor people fly more than rich ones? I know that air travel has become more accessible, but I just can't get too upset about all the people who aren't going to be able to fly to Eastern Europe for the weekend because the fare went from $20 to $50.