With European states getting the nod at the ICAO general assembly in October to introduce a fuel tax from 2007, IATA warns that such a tax would be both unfair and face significant obstacles.
It is no secret that there has been criticism alleging that aviation benefits from preferential treatment since it does not pay fuel taxes nor otherwise cover its environmental costs.
Fuel used for international flights is, according to international law, exempt from taxes. This exemption is based on the principle of reciprocity, which means that states do not tax international transactions, largely because they are unable to harmonise their respective tax levels.
This does not mean aviation enjoys special privileges. In the road sector, fuel taxes are earmarked for road networks. In the rail sector, it is estimated that less than 50% of infrastructure is paid for by users.
Taxpayers are, therefore, paying for rail and road infrastructure that they do not necessarily use. In contrast, air transport infrastructure, such as airports and air traffic control facilities, is entirely financed by those who use it. The airlines pay user charges for the use of airport facilities or flying in a country's airspace. Most of these costs end up on passengers' tickets.
Security measures
Air transport covers all its operation and infrastructure costs, without state aid or fuel taxes. Furthermore, air transport finances security measures at airports, which have been imposed by states in their fight against terrorism. States provide similar security to other modes of transport free of charge.
Environmental costs tell a similar story of unequal treatment. For the road and rail sectors, the few measures of protection against noise, such as sound walls and sound-proofing for homes, implemented in a limited fashion along the sides of motorways and rail tracks, are paid for by states. The same measures, which are much more broadly applied in the vicinity of airports, are financed through user charges, paid by airlines.
Should aviation be charged for its CO2 or NOx emissions, as certain environmental protection organisations would wish? The vast majority of states are clearly opposed to such charges, as the recent 35th Assembly of the ICAO confirmed.
Only European states insisted on keeping this option open, for cases where other measures aimed at controlling emissions, such as voluntary measures by the industry or emissions trading, would not appear sufficient.
The idea of charges on gaseous emissions corresponds largely to a utopian idea. Not only would such a charge be very cost-ineffective, but it would also run into insurmountable legal barriers. It is important to remember here that a tax is generally levied to cover general expenses of a state, while a charge corresponds to paying for a specific service provided to a category of users. A landing charge, for example, is put towards financing the construction and operation of a runway. Similarly, route charges covers the cost of controlling air traffic on that route.
A CO2 charge should, therefore, be used to finance specific measures to control or reduce aviation emissions or their effects. To our knowledge, no such measures exist. There is a fundamental difference with noise protection. Measures do exist to protect people from noise, such as fitting double-glazed windows or insulating roofs; measures that are financed in the vicinity of airports by airline user charges.
Everyone is affected more or less in the same manner by the impact of greenhouse gases that are deemed to influence climate change. Civil aviation represents about 3.5% of all man-made greenhouse gas emissions. If aviation were charged for this contribution, while 96.5% of the pollution coming from other human activities is exempt, it would be a clear case of discrimination.
The fact that air transport makes a unique contribution to our global society cannot be ignored. It provides an efficient mass transport system that underpins trade and tourism, facilitates cultural exchanges and significantly boosts economies worldwide. Over 28 million jobs depend on it.
Balancing act
Striking a balance between economic growth, social development and environmental impact is, therefore, crucial. Over the past 40 years, the aviation industry has made tremendous progress in reducing "perceived" noise at source by 75% and in improving fuel consumption, thus reducing CO2 emissions by 70% per transport unit.
This impressive track record has been largely achieved through the industry's own voluntary initiatives, including the application and dissemination of environmental good practices.
The air transport industry is committed to making further progress towards mitigating its environmental impact, through the most cost-effective actions.
Source: Airline Business
