Air Malta has decided to carry the burden of a new European tax on emissions that is expected to costit €500,000.
Every airline operating in Europe is part of this scheme and it will be up to them to see how to recoup such costs
Other airlines, including Lufthansa and low-cost airline Ryanair, have announced an increase in their prices to recoup the new costs.
However, an Air Malta spokesman told The Times that although the scheme, which came into force on January 1, will cost the beleaguered airline an estimated half a million euro, the airline has decided not to pass this cost on to consumers.
“Every airline operating in Europe is part of this scheme and it will be up to them to see how to recoup such costs. Air Malta has not added these costs to its tickets and any review of prices will be publicly announced,” the spokesman said.
He would not go into whether the airline will consider passing on the cost in the future. Currently Air Malta, which has been in the red for several years, is in the process of implementing a bold cost-cutting exercise to avoid bankruptcy, including hundreds of redundancies.
Sources close to the company said although the national airline could well do without any extra expenses such as the carbon tax, it did not make sense to increase prices, particularly in the current global economic climate.
The aviation industry opposed the introduction of the Emissions Trading Scheme. However the Commission insisted that it should also play its part in combating climate change, being one of the biggest polluters.
Last week Germany’s Lufthansa announced an increase in its prices in to recoup its ETS costs, while Ryanair said it would be introducing a new levy from this week to cover the additional €15 to 20 million that the carbon tax is expected to cost.
Meanwhile, non-European airlines, which, according to the new EU directive, will also have to pay the tax every time they fly to and from an EU member state, are up in arms against the Commission’s decision with some, like China Air, insisting it will refuse to pay the new tax.
The Commission has warned, however, that airlines refusing to pay will be banned from flying to European airports. Following a challenge brought by the American aviation industry, a few weeks ago the European Court of Justice (ECJ) ruled in favour of the Commission having the right of introducing this legislation.
However, the impact of this tax on airlines varies depending on the fleet size and technology used. The impact of the ETS on Air Malta is expected to be low.