The 32 million cap on the annual number of passengers using Dublin Airport means that there will have to be fewer flights and fewer seats this winter. The result will be that some of those who plan to travel over Christmas will be disappointed.
It is not often that I agree with Michael O’Leary of Ryanair, but when he warned that the cap on passengers at Dublin Airport would see higher air fares this winter, he was correct. Like an Oasis concert, prices will rise in order to match demand to reduced seats.
In the absence of further Government action, airlines will raise fares, and thus make a higher profit per passenger. While the cap remains, a better alternative, one not flagged by Michael O’Leary, would be for the Government to introduce a substantial tax on every passenger passing through the airport this autumn and winter. The outcome for passengers would be the same, whichever option prevails: significantly higher fares, especially on shorter journeys. The only question is whether the increase in payments by passengers goes to shareholders in airlines or to the Government.
The optics of a substantial tax on passengers over Christmas, with the Government playing Scrooge, means that raising taxes in the budget is unlikely. This will leave the benefits of the higher fares with the airlines: Ryanair’s profits will rise. Either way, visiting friends and relatives over Christmas is going to be more expensive because of the continuing cap on passenger numbers at the airport.
A number of possible policy reasons can be advanced in favour of the passenger cap. The first, and most important, is to reduce greenhouse gas emissions from flying. Secondly, to reduce noise nuisance for those living under the flight path and, thirdly, to reduce road traffic to and from the airport. However, in each case there are better ways to achieve the objectives than a cap on passenger numbers.
On the traffic front, short-term measures could include more frequent and more reliable buses – and improved shelter, signage and real-time information at the airport’s bus park. The longer-term answer is to get the metro built.
In the case of noise nuisance, the answer is to retrofit the limited number of houses affected. Our daughter’s house in Minneapolis is on a flight path, where planes pass overhead at 3,500ft, so I can vouch for the effectiveness of the insulation option. The airport recently funded further noise insulation enhancements. Better insulation also means energy savings and cosier homes, even without the rigours of a midwest winter.
With a shared planet, we need an international agreement that all aviation be taxed on emissions
Worldwide, the demand for air travel is increasing faster than rising incomes – for leisure, for business, for family visits. It’s a huge challenge in decarbonising the world economy. Today there are more than half a million Irish-born living abroad, and a million foreign-born people living in Ireland. Keeping families apart to reduce passenger numbers is impracticable.
Because carbon-free alternatives are not currently available, aviation will be one of the last users of fossil fuels. The challenge is to limit that usage as far as possible, to rapidly drive research into an alternative energy source for aviation and to limit emissions.
The best way to do this is to tax emissions of greenhouse gases from aviation. Rather than crude per-passenger charges, aircraft emission taxes should be closely related to distance travelled. We’ve seen how steadily increasing carbon taxes have driven the development of electric cars, as carmakers’ future survival depends on switching from petrol to electric models.
Similarly, if aviation emissions are taxed appropriately, the big aircraft and engine manufacturers will know that developing more fuel-efficient aircraft, and a carbon-free alternative power source, would be hugely profitable.
The EU already taxes aviation emissions within the union, and this cost will rise over time. However, taxing flights outside the EU is much more difficult. For example, if a suitable tax was levied on flights from Paris to Singapore, many passengers would fly through Istanbul, changing planes there to avoid carbon taxation on much of the journey. The result would actually be higher emissions from two take-offs and landings.
With a shared planet, we need an international agreement that all aviation be taxed on emissions. A European Commission paper last week estimated that a suitable global tax would raise €140 billion. That would pay for developing carbon-neutral aviation, and also be a big investment in decarbonising the world economy. Such an agreement is, however, a long way off. The EU needs to supplement the tax stick with a carrot of incentives for research on carbon-free aviation technologies.
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