Airlines “cannot expect a free pass” on taxes aimed at reducing carbon emissions, despite the industry’s marked resistance to an EU report on taxing aviation.
That is according to UCC economics lecturer Declan Jordan, who was speaking after the Airlines for Europe (A4E) lobby group slammed an EU study that said an increase in taxes would result in less flights, less passengers, but a lower negative impact on the environment.
While new or increased taxes would have a negative impact on aviation, including lower employment within the industry, its impact on the overall employment, revenue, and GDP of individual member states would be “close to zero”, the EU report said.
Less connectivity and economic growth caused by aviation taxes would be offset by less congestion, positive environmental impact, and a decrease in noise pollution, it said.
A4E criticised the report, saying it did not take into account the impact on tourism and 600,000 “highly specialised jobs” within the industry.
A4E managing director Thomas Reynaert said: “Our focus should remain on finding ways to reduce CO2 emissions rather than short-sighted and ineffective measures such as new taxes.
However, UCC’s Mr Jordan, who is also co-director of the Spatial and Regional Economics Research Centre, said airlines had to take their fair share of the tax load, and that the tax needed to be significantly high.
“It simply has to happen and no sector can expect a free pass.
"The tax would want to be really high because it has to give airlines the incentive to really up their game when it comes to investing in cleaner methods.”
He said regulators had to make sure that airlines did not pass taxes onto the consumer, if it was to be effective.
"That revenue generated by aviation tax must be reinvested into the likes of renewable energy, reforestation, and other policies that will positively impact the environment.”
A problematic issue would be ensuring Irish citizens were not disproportionately impacted by an airline tax, he said.
“Ireland is an outlier that relies on air connectivity to Europe, and doesn’t have the ease of rail access that means you can be in the likes of Berlin from Paris within hours.
"We would have to make ferry travel more attractive to passengers,” Mr Jordan said.