Aviation Industry Rally Against EU Carbon Tax

By: EW News Desk Team   Date: 12 March 2012

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12 March 2012

Seven aviation leaders including Airbus and British Airways have written to Europe’s political leaders decrying the recently introduced EU carbon tax, arguing that the tax on pollution threatens employment stability and trade.

The signatories include plane-maker Airbus, British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin and Iberia, who jointly submitted the letter to the leaders of Britain, France, Germany and Spain, the four countries that helped found Airbus.

According to industry players, the tax could lead to billions of dollars in losses, which ultimately translates to more expensive air travel and job losses.

Europe’s largest long-haul carrier, Lufthansa, has already started implementing a carbon surcharge in its fares. According to the German carrier, the controversial carbon tax scheme will cost the company an additional 130 million euros in 2012.

Related News: Lufthansa Passes Carbon Surcharge On to Passengers Following Trade Spat

China, who also opposes the tax, has reportedly suspended its purchase of 45 Airbus planes made in Europe because of the levy – a deal worth almost $12 billion.

Airbus CEO Thomas Enders was quoted as saying:

The measure is threatening more than 1,000 jobs (at Airbus) and another thousand through the supply chain.

"The ETS issue started out as a discussion over environmental legislation but is turning into a trade conflict," an Airbus spokesman told the Financial Times, who first reported the story.

The European Union has gone ahead with its Emissions Trading System which levies a carbon charge on flights in EU. From the 2nd of January this year, airlines landing or taking off from any airport in the 27-member EU block, including its three neighbouring nations, are required to pay a fee for carbon emissions that exceed a given cap.

However, the EU has said the tax will help it achieve a goal of cutting carbon emissions by 20 percent by 2020 and has insisted it will not back down on the plan.

Defending the plan, the EU said the additional costs are 'manageable', estimating that the scheme could prompt carriers to add between 4.0 and 24 euros ($5.25 and $31.50) to the price of a round-trip long-haul flight.

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