Airline|

Lufthansa to Charge Passengers More

Plane EmissionsThink flying is already too expensive? Well, there is some bad news on the way. Apparently Lufthansa is one of the first airlines to admit that it is passing on the cost of the European Union Emissions Trading Scheme to its passengers. This scheme is expected to cost the airline some 130 million euros, and they do not plan on covering the cost themselves. Thus, its ticket prices are going to have to rise.

Due to this, many other airlines are likely to follow. After all, Lufthansa is the largest airline in all of Germany. The announcement was made on Monday. The overall goal right now is to add this European Union Emissions Trading Scheme onto its fuel surcharge. This would make Lufthansa the first carrier to provide details of how it plans to cope with this new burden.

In a recent statement, the airline said, they face troubled times and stiff competition. This goes double for airlines that are not even located in the European Union. Lufthansa is now going to have to pass on the burden of this new scheme via ticket prices. This was suggested by the European Union.

In the short term, Lufthansa will not raise its visiting surcharge. This is good news since the airline had increased this surcharge just last month. In fact, it rose between 102 euros and 122 per flight leg for intercontinental flights. Not only that, but it rose an additional 31 euros for domestic flights. The airline said at the time that this was to cover higher fuel costs.

As most people already know, starting this year, all airlines which touch down or take off from airports in the European Union will have to account for their CO2 emissions as part of an expansion of the world’s largest carbon market. Since there are no planes that release no carbon, all airlines will have to pay something into this scheme if they want to fly to the European Union.

Global airline group IATA said that it estimates that the annual industry-wide cost for this European Union Trading Scheme will rise to 2.8 billion by 2020. This is a huge jump since it should only cost the industry about 900 million this year. This means, over the years, this scheme is just going to continue to cost airlines more and more.

Airlines around the world have been trying to block this scheme. This goes double for the United States and China. However, the highest court in Europe just backed the scheme last month. This means that all the attempts to block the scheme have been denied. This has drawn a lot of anger from China and the United States.

To start with, airlines will collectively receive free permits in 2012 amounting to about 85 percent of their sector’s total emissions. This is because the limit is based on emissions over 2004 and 2006. Most carriers are not expected to need to buy more. However, at this point, it is still too early to tell.

 

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