Protests may help lower EU carbon tax impact on airlines

Strong protests by non-EU nations, including India, may lead to a lowering of the quantum of the carbon tax on airlines flying in and out of Europe.

If the quantum of tax is reduced, fares are unlikely to rise sharply, leading European carrier Air France has indicated.

Most airlines, including European ones, have indicated that they will pass on the tax to passengers. Air France and KLM jointly fly 30,000 passengers a month from India.

Mr Alexandre De Juniac, Chairman and CEO of Air France, said: "Countries are lobbying against imposition of this tax. This may bring down the actual amount payable." He was addressing a global press conference jointly with Charles de Gaulle Airport, Paris (CDG), to announce 'Hub 2012'.

The European Union has introduced a tax under EU ETS, commonly known as carbon tax. This has not gone down well with countries such as India, China and the US, besides others. These countries have asked their airlines not to buy carbon credits for the tax liability. They have also threatened to take retaliatory action against European carriers.

It is estimated that the rate of carbon tax could be $8 a tonne. At this rate, Air France along with KLM is expecting to make a provision of ?40 million last year towards carbon tax liabilities.

However, Mr De Juniac said that the tax will not hit traffic growth at Paris Airport. Air France along with Paris Airports have launched new programme 'Hub 2012'to attract more international traffic.

NEW ARRANGEMENT

Terming the year 2012 as 'year of transformation', CDG plans to start new terminal, Satellite 4 (at the cost of ?580 million) and a new departure lounge at terminal 2E. With this new arrangement, there will be seamless movement for passengers using Paris as the transit point.

For example, a passenger from India will be able to transit to a US flight from the same terminal he or she arrives in (Terminal 2E). For Europe, transits will be from Terminal 2F, for which a fast train will be available.

Ease of transit will be a key selling point for CDG, since every second passenger arriving is a transit passenger, according to Mr Pierre Graff, Chairman and CEO of CDG. For example, a total of 260,000 passengers arrived from India last year, out of which 1.69 lakh were transit passengers. In order to facilitate Indian passengers, Air France has a multicultural team. Members consist of Hindi speaking people ready to help passengers as soon as the flight lands.

Source