What are the Spanish airlines playing with the ecotax on plane tickets in France

Flying from Paris, Bordeaux or Lyon will be between 1.5 and 18 euros more expensive from next year. France has been the latest country to join the ecotax to tax aircraft emissions, with a direct impact on the pockets of passengers. The French Minister of Transport, Elisabeth Borne, will apply this tax to the tickets of all flights departing from that country, except for destinations such as Corsica, French overseas territories and connecting flights. It also excludes arrivals.

But what impact can this measure have beyond the obvious – and necessary – reduction of carbon dioxide emissions in European skies? Airlines are on alert because they foresee a drop in demand and consider that a new tax “will not help the industry to invest in clean energy and technology,” says the International Air Transport Association (IATA).

Iberia (IAG) has endless routes from Bordeaux, Strasbourg, Lyon, Marseille, Nantes, Nice, Paris (both at Charles de Gaulle airport and Orly), Rennes, Toulouse, Vatry and Bastia (Corsica). His ‘sister’ Vueling has not offered the data requested by El Confidencial. For its part, Air Europa (Globalia) operates four routes linking Madrid, Valencia, Palma de Mallorca and Malaga with the French capital, transporting more than 455,000 passengers so far this year.

An ecotax at European level “would result in an average increase of 10% in the price of tickets and an 11% decrease in passenger demand”, details a recent report by the European Commission to which this newspaper has had access, called ‘Taxes in the field of aviation and their impact’. All this has a negative impact on employment linked to aviation (-11%).

And he gives as an example two other European countries that have also proposed a green tax on airlines. The Netherlands is facing a 19% increase in ticket prices, with effects on connectivity (-19%) and employment (-20%). The expected rate increase in Belgium amounts to 16%, with a 16% drop in both connectivity and employment.

“The analysis shows that a new tax will have a negative effect on the airline industry … Which means that any change in the tax regime must be studied with great care”, especially since aviation has a priority role in many Member States. One such country is Spain, where tourism accounts for 14% of GDP.

Aviation has a priority role in European countries such as Spain, which forces us to analyze tax initiatives with great care

The other side of the coin translates into a reduction in CO2 emissions (-11%) and people affected by airport noise (-8%), the Brussels report continues. The main beneficiary will be the environment, which has been on the agenda of European politicians and business for years. “Airlines have made a great investment effort to renew their fleets and build more efficient aircraft, one of the main ways to meet emission reduction commitments,” they explain from the sector.

Those same sources criticize that governments promote new rates without first activating the tools that already exist to reduce emissions, such as the single European sky. This Community initiative (2004) seeks to restructure the continent’s navigation management system to end inefficiencies in airspace, towards a more efficient air transport system.

Few of the companies contacted by this newspaper want to make individual assessments of the ecotax in France. “The tax is wrong. Since 1990, airlines have reduced emissions by 50% per passenger (…) The french tax will reduce the 100,000 million euros that aviation generates for the French economy, and will put at risk 500,000 jobs due to the loss of competitiveness, “says the employer IATA.

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France recorded a passenger volume of 141 million in 2018 (according to IATA), with forecasts to increase the figure to 210 million within 20 years. Today it is in ninth place worldwide, although it will fall to the eleventh position. Not to mention the impact of the ecotax, because the employers have not yet had time to measure it.

What will Spain do? The peripheral position of our country and its high dependence on tourism mean that the Minister of Economy, Nadia Calviño, does not see with good eyes an ecotax like the French one. But the airline industry almost takes it for granted that the government is preparing some kind of alternative to tax polluting emissions from airplanes. It is enough to rescue the statements of the Minister of Ecological Transition, Teresa Ribera, who described the measure proposed by Belgium as “interesting”.

In any case, it does not make much sense for each country to ‘pull out of its sleeve’ a different tax without a consensus at European level. Companies are calling for a harmonization of the ecotax in Brussels to know what to expect and, above all, to prevent some regions from having more competitive advantage over others, as warned by the president of the Association of Airlines (ALA), Javier Gándara. The debate is already served in the European institutions.

Spanish airlines are not the only ones affected by the French tax. Air France has publicly opposed the measure because it “penalises competitiveness at a time when we need to strengthen investments to reduce the environmental footprint faster”. The French company estimates an extra cost of 60 million euros per year. The British ‘low cost’ EasyJet is pronounced in the same line and bets on incentives for efficient flights.

“We must encourage fleet renewal, modern infrastructure and a high occupancy rate,” they add from EasyJet. Norwegian Airlines notes that it is still a small operator in France, with some frequencies from Paris (Orly and Charles de Gaulle) and four other routes from Bordeaux, Montpelier, Nice and Bastia only in summer. Ryanair and Vueling have not responded to El Confidencial’s request for information at the close of this article.

Source: The Confidential