UAE’s flag carriers warned on Tuesday European Union’s carbon trading scheme will lead to higher flying costs and a steep hike in ticket prices.
Tim Clark, the president of Emirates, told the Gulf News that the airlines would spend over ?40 million this year to purchase additional emission allowances under the new EU guidelines.
“Unfortunately, while we always try to make our fares as competitive as possible, the additional costs of the EU Emissions Trading System programme will almost certainly have to be passed on to customers, but how this will be done has not yet been determined,” the chief of Dubai’s flag carrier and the world’s largest long-haul airlines said in an interview.
EU introduced new regulations to tackle climate change effective from 1 January. Under the plans which are part of an expansion of the world’s largest carbon market, airlines touching down or taking off in the 27-nation European Union and three neighbouring nations will be charged for their carbon dioxide emissions.
Etihad Airways, UAE’s national flag carrier, also expressed its concerns over the new measures.
“It is inevitable that such a cost would have an impact on fare levels. This is why we want to ensure we have a fair global system,” Coppell said. The airlines’ head of environment told the Dubai-based paper that Etihad would be paying an additional ?310 million ($403.9 million) over the next nine years.
German flag carrier Lufthansa has also voiced similar concerns on Monday and warned EU’s new regulation will hurt air travel due to higher ticket prices.
The European Union insists the new scheme, also applicable to other industries, is the fairest way to tackle global warming and stem aviation industry’s contribution to carbon emissions. Despite its assurances, the new regulations have drawn intense ire from United States, China, India and other countries who accused EU of infringing on their sovereignty.