I was living in Edinburgh when I first saw an advertisement that would transform air travel. “Making flying as affordable as a pair of jeans – £29 one-way.” The fare for EasyJet’s first flights from Luton to Edinburgh and Glasgow in 1995, celebrated in its inaugural advertisement campaign, seems rather pricey by modern standards. You can get a ticket on that route on EasyJet for less than £29 today and fares on some other low-cost carriers can be under a tenner.
But cheap deals might be a thing of the past. France is seeking support from other European Union countries for a minimum price for airfares within the EU in a bid to reduce the number of flights in Europe and reduce the aviation sector’s CO2 emissions. Transport Minister Clement Beaune wants to “open the debate on the fair social and environmental price of a flight ticket”. The Netherlands and Belgium support the idea in principle. Although Brexit means flights from Britain to EU countries might not be covered by any new EU price policies, flights from the bloc to the UK would be.
France has already banned domestic flights for journeys that are possible in less than two-and-a-half hours by train. The Dutch government is going ahead with plans to cap the number of flights at Amsterdam’s Schiphol Airport next year, pending EU approval, in a bid to reduce noise pollution and greenhouse gas emissions.
We all want to reduce carbon emissions, whether on the ground or at 39,000ft, but Paris’s minimum pricing proposal is a bad idea for three reasons. First, it will penalise the less well off and be unlikely to reduce the number of flights. Those who take one or two flights a year to go on holiday with their family will still fly but find the cost onerous at a time when they are grappling with high inflation and mortgage rates. The well off will fly just as much as ever and absorb the cost. This, hopes Eddie Wilson, chief executive of Ryanair, will make the proposal “politically impossible” to introduce because “saying that poor people can’t travel generally doesn’t fly in France.”
Second, it risks damaging a hugely important industry. Research by the International Air Transport Association shows the overall European aviation industry is worth £800 billion and supports 13.5 million jobs. In Britain alone aviation supports 400,000 jobs. Ryanair closed its two-aircraft base at Brussels’ Zaventem Airport during last winter, blaming increased charges and taxes, after Belgium introduced a €10 tax per passenger on flights shorter than 500km, and a €2 levy per departing passenger on EU routes.
Third, anyone who remembers the bad old days of the 1970s will recall with horror what happens when prices are fixed. They only go one way. Up and up.
Rather than seeking to reduce the size of the aviation sector, governments should impose measures to encourage the development of sustainable aviation fuel (SAF), which can reduce the total carbon emissions from a flight by about 80 per cent. The EU knows this well. Under its own Refuel programme agreed earlier this year, airlines will have to blend 2 per cent of sustainable aviation fuel (SAF) into their fuel loads by 2025 and 6 per cent by 2030.
The EU has also ruled that aviation will in future be fully included in its emissions trading “carbon market”. That means European carriers will have to purchase emissions allowances to cover every tonne of carbon dioxide their flights release into the atmosphere. For a round-trip from London to Athens (406 kg of CO2), the new carbon taxes are estimated at €32.50 (£27.75) per person – almost €8,000 (£6,825) for a full Airbus A321. Much of the money raised will be ploughed into research into developing SAF.
The good news for consumers is that EU complexities mean the French minimum pricing proposal is unlikely to become law. Two years ago Austria proposed a similar measure, but legal issues around the rights of companies freely to set their own prices across the EU meant the government abandoned it. EU leaders often find it hard to reach agreement on aviation matters. Talks on aviation fuel taxes have run into the sand, with some governments opposed to passing measures that could raise prices for voters ahead of EU elections next year. With a bit of luck, Paris’s half-cooked idea will also fail and EU governments will, instead, begin to put new technology, not higher fares, at the top of their environmental to-do list.