Contributor - Europe

Cathy Buyck

Ryanair argues that a tax on kerosene would more effectively reduce aviation’s carbon emissions than the EU emissions trading scheme (ETS) and the various national environmental taxes surfacing across the continent, which it claims distort competition and are designed to protect the legacy carriers and the large hub airports—and by default do not lessen CO2 emissions. “A tax on kerosene has merit as long as there no exclusions, not for any airline, for any kind of flight—e.g. connecting or long-haul—or airport,” Ryanair chief marketing officer Kenny Jacobs told AIN on the sidelines of a press briefing announcing the low-cost carrier’s summer 2020 schedule in Belgium.

 


He called on the next European Commission, which will take office in November, to look at aviation in a “sensible” way because the sector contributes only 2.5 to 3 percent of global CO2 emissions. “Aviation is not the worst culprit amongst all modes of transport,” he stressed. European Commission president-elect Ursula von der Leyen wants a climate-neutral Europe by mid-century and has defined the “European Green Deal” as a key priority for the next five years.

 


“Any taxation proposal [on aviation] that is being considered by Brussels needs to create a level playing field and needs to encourage the right behavior. The goal is a reduction of CO2 on every flight,” Jacobs said. A tax on kerosene would achieve that aim, he asserted. It would promote the use of younger aircraft, which use less kerosene and produce less CO2. “All airlines should embrace it,” he said, while admitting he would be surprised if all European carriers would see a kerosene tax as the right mechanism to replace the EU ETS. He described both the EU ETS and the recent French and <a href="https://www.ainonline.com/aviation-news/air-transport/2019-05-14/dutch-government-sets-rates-new-aviation-tax">Dutch environmental tax proposals</a> as “flawed,” the first because it excludes long-haul flights, which produce more CO2 than short-haul flights, and the latter because they exempt connecting flights. “There would be an eco-tax on a direct Ryanair flight from Amsterdam Schiphol Airport to Brussels but a connecting flight from Dublin over Amsterdam to Brussels would be exempt while producing more CO2. How does this make environmental sense?” Jacobs asked.

 


While in a statement Ryanair stressed it favors no new taxes at all, it also noted that any tax—if enacted—must&nbsp;ensure "a level playing field" without exclusions for connecting flights or long-haul flights.&nbsp;

 


“We are not deflecting our responsibility. Aviation needs to do more, is doing more to reduce its environmental impact,” he said, reaffirming Ryanair’s ongoing environmental commitment. The LCC has updated its carbon efficiency target, aiming to cut CO2 emissions by 10 percent from 66 g per passenger/km to 60 gr by 2030.

 


The airline’s fleet renewal with 210 Boeing 737 Max 200s—135 of which remain on firm order&nbsp;along with options for 75—would prove key to achieving that goal. Ryanair expected to start taking delivery of its Max jets, configured with 197 seats, over the summer. “There is not much to say on the Max,” Jacobs conceded. “We will get it when we get it. We hope in February, but it could slip to March. We still hope to have 30 by the end of June [or] early July, which is 30 less than we had planned for.” The airline has formulated no backup plan in the event of a further delay of re-entry into service, he said, reiterating a statement by Ryanair group CEO Michael O'Leary at the company’s annual general meeting earlier this month. Ryanair has stopped pre-delivery payments to Boeing and has entered talks with the manufacturer about compensation.

 


Jacobs insisted that Ryanair “absolutely” harbors no interest in taking over Thomas Cook’s German airline subsidiary, adding he would not comment on the <a href="https://www.ainonline.com/aviation-news/air-transport/2019-09-25/condor-secures-government-backed-bridging-loan">German government’s decision to grant a guarantee for a bridging loan</a>. “There are conditions attached to the loan, so let’s wait and see,” he said, admitting, though, curiosity over why Condor reportedly asked for a €200 million loan and walked out with a €380 million guarantee.

 


The failure of a growing list of airlines in Europe is part of the ongoing consolidation, he asserted. “We have been talking about this for two years,” said Jacobs. “Europe will continue to consolidate into fewer and bigger airlines.” While more airline bankruptcies in the coming months appear likely, Jacobs suggested regulators consider establishing a stress test for weak airlines and tour operators—like the stress tests imposed on banks after the financial crisis in 2008—to prevent large and costly repatriation efforts. The UK CAA needed to wet lease capacity after the collapse of Monarch in 2017 and again this week with the grounding of Thomas Cook Airlines UK, which left some 100,000 and 150,000 passengers stranded abroad, respectively. “A stress test to stop these events happening again would be a better outcome for consumers and for taxpayers, who end up having to pay for these costly repatriations,” concluded Jacobs.

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