Higher air fares on the way as airlines tackle greenhouse gas emissions

Passengers will have to pay for a scheme to tackle airlines’ greenhouse gas emissions due to be agreed later this year.

The International Civil Aviation Organisation, a United Nations body, is likely to decide in the autumn on a trading system to allow airlines to pay to cut the impact of greenhouse gas emissions from their craft.

International Air Transport Association (IATA) director general, Tony Tyler, confirmed at its annual general meeting in Dublin yesterday that the proposal would cost the industry.

Cost

“Ultimately customers will have to meet that cost,” he said. “The overall cost to the industry will be affordable and will not adversely affect the price of tickets.”

Through the emissions trading scheme, airlines will fund projects such as forestry conservation and alternative energy, to counter the impact of their greenhouse gas emissions.

While this is likely to boost air fares, other factors are currently pushing them in the opposite direction. Cheaper fuel costs will cut ticket prices across the global airline industry by about 7 per cent this year.

The association also believes that cheap oil will help push industry profits to $39.4 billion (€35.3 billion) in profit this year, more than the $36.3 billion forecast in December.

However, while airlines’ fuel costs will fall this year, the association noted that oil prices are set to rise slowly in 2016.

A Siptu-backed protest by airport workers from around the world greeted the opening of the IATA meeting at the Royal Dublin Society complex in Ballsbridge on the capital's southside.

Airports United, a new international trade union group supported by Siptu, says that practices such as contracting out airline services attack workers' pay and conditions.

Risk

International Transport Workers' Federation General Secretary, Steve Cotton argued that this is leading to delays and increased risk of security breaches.

Addressing the meeting, the Minister for Transport and Tourism, Shane Ross, confirmed that the new Government would keep air travel tax at zero.

The previous administration cut the levy, which was 3 per cent, after airlines argued that it was hindering growth. The move prompted Ryanair and Aer Lingus to launch a spate of new routes in 2014.

Mr Ross also called on US authorities to grant Irish-registered Norwegian Air International a foreign carrier’s permit that would allow it run services from Cork and Shannon to Boston.

The Cork service was due to begin last month but was postponed as Washington’s department of transportation has yet to license Norwegian.