Gulf carriers yet to decide on carbon tax

While some global airlines almost immediately started passing on the European carbon tax fees to customers since their implementation on January 1, Gulf carriers have not yet done so. Big airlines in the region such as Emirates and Etihad Airways, like all airlines worldwide, are being charged the carbon tax by the European Union under its Emissions Trading Scheme (ETS) for flying in and out of Europe. Germany's largest carrier, Deutsche Lufthansa AG, said on January 1 that it will pass on to its customers an expected €130 million of costs for carbon permits it needs this year under the EU ETS. Asked if Emirates had taken a similar step, a spokesperson told Gulf News yesterday that the carrier has not yet started passing this cost on to passengers, but divulged no further details. Article continues below The carrier said earlier this week it expected to lose over €40 million to purchase additional emissions allowances in 2012 alone and well over half a billion euros by 2020. "Unfortunately, while we always try to make our fares as competitive as possible, the additional costs of the EU ETS programme will almost certainly have to be passed on to customers, but how this will be done has not yet been determined," Emirates President Tim Clark recently told Gulf News. Extra burden Similarly, Etihad Airways, which expects to end up spending an extra €310 million (Dh1.48 billion) over the next nine years on carbon taxes, has not yet started adding the additional carbon charge to customers' tickets, as confirmed by the airline's spokesperson. However, Linden Coppell, Etihad's Head of Environment, said earlier that it is inevitable that such a cost would have an impact on fare levels. Questions sent to Qatar Airways, meanwhile, went unanswered. Asked how much of the cost airlines are expected to pass on to customers, Ernest Arvai, President and CEO of aviation consultancy The Arvai Group, told Gulf News: "They will pass as much as they can to the customers, but nobody wants to be first to announce a fare increase." He added that if the EU tax stands, it will cost "about $20-$30 additional per passenger per trip for short haul trips within Europe". According to another analyst, Andrew Charlton, Managing Director of the Europe-based strategic advisory, government and public affairs firm Aviation Advocacy, for flights to and from the Gulf, the increase in ticket prices as a result of the move will be considerably less than €10 as a result of the move. The cost is directly related to the distance flown," he said.