TICKET prices of flights to and from Europe are likely to go up next January, when the aviation sector will be included under the European Union’s emissions trading system (EU ETS), despite continued opposition from airlines overseas.
The EU has set a cap on carbon dioxide emissions, with airlines having to pay for emissions that exceed those limits.
Speaking to media on the sidelines of the IATA AGM in Singapore earlier this week, Lufthansa CEO, Dr Christoph Franz, estimated that the ETS would result in an additional annual cost of 150-350 million euros (US$220 million to US$512 million), depending on the actual price of certificates.
Dr Franz explained that while the airline had started to purchase certificates, it has yet to introduce any ETS surcharge in ticket prices, as there were still doubts whether the scheme would be implemented as scheduled.
He added that the ETS was being met with vehement protest from some countries that “have even announced retaliatory measures against EU carriers, which will then increase the competitive disadvantage for European carriers”.
Some 4,000 aircraft operators around the world will be affected by the scheme, with many arguing that the EU has no right to unilaterally impose this on carriers from other countries.
US airlines will take their case to the European Court of Justice next month, while the China Air Transport Association has said it would recommend “harsher counter-measures” against flights by European carriers operated in and out of China.
At a CEO forum during the IATA AGM, Emirates Airline president Tim Clark said the EU’s scheme would likely spawn a series of ETS-like measures in other regions like Asia and the Middle East, further burdening the industry.
“We are now perhaps the highest taxed entity of any business on the planet today,” he said.
– Read more in TTG Asia, June 10 issue
