Ryanair Passes on Carbon Tax to Passengers
For European travelers, as well as their cousins who cross the ponds for an extended holiday, Ryanair is the ticket to exploring 160 cities throughout the continent, Britain and its base in Ireland. What started off as a puddle jumper connecting Gatwick to to Waterford is now a giant that operates 1400 flights a day. Flying Ryanair makes traveling with an American legacy airline feel like an Air Force One experience, but the 73.5 million passengers who flew on the company’s fleet speak volumes about the company’s success. Notoriety is certainly part of Ryanair’s business model. Synthetic leather seats, no seat back pockets, dodgy customer service, penalizing passengers for not printing their boarding passes before arriving at the airport and cheeky threats to charge for lavatory use are all part of the Ryanair schtick. Now Ryanair is passing on the cost of the European Union’s aviation carbon tax. Beginning on January 17, Ryanair will charge a €0.25 fee (UK 21p, or US 32 cents) on every seat to cover what the company says will be a €15 to 20 million bill. The airliner lashed out at the ETS (Emissions Trading Scheme) and dismisses it as the EU’s “eco-loony ETS tax.” Claiming that the airline is already the greenest in the industry, Ryanair has cried foul over the tax since the total carbon emissions that result from air travel are less than two percent of the EU’s total CO2. Ryanair’s communications maestro Stephen McNamara fumes that the ETS levy does nothing but “damage traffic, tourism, European competitiveness and jobs,” but the bellyaching is vastly overstated. Air passengers have already become accustomed to paying for what used to be included in the air ticket: checked baggage, meals, choosing a good seat and (often dubious) airport security. As I was booking a flight within two Middle East airports today, I was not surprised to see that my air ticket was at first about US$30, only to see that after “taxes and fees,” the final price had tripled. In fact, businesses could take these “fees” and turn them into revenue streams, whether they are charging for bags at the store checkout stand or when sending a package by courier. Furthermore, as the news site Business Green points out, adding that tiny fee can actually be beneficial because consumers can see that paying for environmental measures are actually a sliver of a product’s or service’s overall cost. UPS, for example, offers a green shipping option that ranges from 10 to 75 cents in the USA. With oil prices promising to go no where but up in the long run, it is up to airlines like Ryanair and Southwest to strive how they can to become more energy efficient--a carbon tax is one way to spur them even more to run leaner and smarter. What stop consumers from traveling are their wallets or credit card limits. Ryanair will continue to thrive despite this tax. Even the free market Economist welcomes this tax, saying it is a “modest corrective” that should be rolled out worldwide. And finally, all industries, many of which contribute one to three percent of a region’s CO2, has got to do their part. Ryanair can still post those £9.99 fares from Liverpool to Rimini--its customers are resigned to the fact that fees upon fees are tacked to those fares anyway. In the meantime, the debate over a carbon tax rages on, as it should--it is more of an insurance policy that deals with climate volatility than a nefarious “tax.” Perhaps it can even teach people to travel more responsibly. Published earlier today on Triple Pundit. Photo courtesy Wiki Commons.