US Carriers Add Charge for Carbon Tax

Last Tuesday, Delta Air Lines announced that it has added a $3 charge on fares each way. The surcharge will be applied to flights booked in the US for European destinations. The move is due to lessen the blow of the Emissions Trading Scheme (ETS) that the European Union pushed on all carriers that fly into their airspace. After the announcement, more US airlines have announced that they will match the surcharge.

The carriers that have joined Delta in this surcharge are US Airways, American Airlines and United Continental. The move was confirmed by the airlines on Thursday, following the activation of the ETS legislation on January 1, which holds the airlines responsible for the carbon their jets emit. However, the first carrier to add a fee to its services due to the carbon tax was Lufthansa, the national German airline.

Airlines around the world have been unsuccessful in blocking the new regulation from being put into effect. They say that it will put too much financial pressure on businesses that are already having a hard time making a profit in the current economic environment. High jet fuel costs have been one reason why some major carriers in the US have had to reduce capacity, increase charges for additional services and raise ticket prices.

The ETS has been attacked by the US, China and India, as well as some others, saying that it infringes on their sovereignty. Airlines for America challenged the law in the highest European court, which failed. The group is now reviewing its legal options. It estimates that the regulation may cost $3.1 billion for the US aviation industry between 2012 and 2020. Some experts in the industry have predicted that the ETS could mean airfares between the US and Europe rise $50 to $90 as the cost is passed onto consumers. This is upsetting to travellers – particularly businesspeople who journey to Europe frequently and will have to pay more to do so now.

In the last week, airlines in China have outright refused to pay for the carbon permits required for flights to travel in European Union airspace. At the same time, carriers in India have threatened to withhold information about their carbon emissions in order to avoid having to pay the tax. However, it’s not surprising that environmentalists support the ETS, as they are trying to keep greenhouse gases from seeping into the atmosphere.

The European Union believes that the cap-and-trade legislation will do more good than harm – resulting in only a few dollars being added to ticket prices. They aim to encourage carriers to improve their efficiency and, in turn, their profits.