The debate within the EU on a taxation that levies kerosene, within the framework of the regulatory package fit for 55, has the Spanish air sector on alert, which has once again demanded a position against the Government this morning. The measure must have the unanimity of the Member States to move forward, to which the Airlines Association (ALA) stresses that Spain could lose 4.5 million tourists in 2030 and about 169,000 jobs.
The president of the group, Javier Gandarahas indicated in a press conference that ALA will seek that other associations of the sector in Portugal, Italy or Greece measure the impact of this type of fiscal measures, just as the Spanish company has done with a report commissioned to Deloitte, to educate their governments. It is about forming a pineapple from countries receiving European tourists that they would lose competitiveness with green taxation compared to nearby non-EU destinations, such as those in North Africa. And it is that the kerosene tax is only raised for intra-community flights.
The impact on tourism spending, according to the recent study signed by Deloitte, would translate into a loss of 9.3 billion GDP in Spain. The review of the Directive on Energy Taxation it provides for a tax rate on aviation kerosene, currently exempt, with minimums and a progression for ten years starting in 2024. For their part, sustainable fuels would benefit from a zero rate. In the first year, the airlines would charge 10% of the 10.75 euros per gigajoule set, increasing the application by ten percentage points per year until the aforementioned objective is reached in 2033.
In 2030 the tax would be 7.53 euros per gigajoule (294 euros per ton of kerosene) and the Deloitte report commissioned by ALA speaks of a 44% rise in the price of fuel, which would result in 5.5 % increase in average ticket price.
The companies under the umbrella of ALA are willing to make the effort required to reduce the carbon footprint through sustainable fuels (SAF) or the application of an ETS emission rights system, or that will already mean additional costs for the sector. “Let’s not forget that the ultimate objective of the measures must be to reduce aviation emissions,” stressed Gándara, who demands incentives for the production of SAF, still extremely low and with prices outside the market.
Regarding sustainable fuels, the initiative Refuel Aviationdesigned in Brussels, requires a minimum use of 5% of SAF mixed with kerosene in 2030, a level that will rise to 63% in 2050. Current aircraft engines allow 50% mixtures, which would eliminate 80% of the emissions.
moderate optimism
Despite the uncertainty of the moment, due to the inflation crisis and the war in Ukraine, ALA spoke this morning of a clear recovery in air traffic in Spain, reaching a 94% reactivation rate in operations (98% already in October) and 87% in passenger movement (97% in October). For the winter season (November 2022-March 2023) have been programmed 114.2 million seatswhich represents an increase of 4.4% over the same period of 2019-2020 (excluding March 2020 due to the effect of the pandemic).
The offer of seats in the Canary Islands (17.3%) and the Balearic Islands (9.3% increase) has risen sharply, starting from a base in which it was perceived, especially in the Canary Islands airports, the bankruptcy of Thomas Cook.
Gándara has highlighted the better performance of international traffic, with recovery levels in October of 95% on intra-European flights and 89% on intercontinental, and also the recovery of load factors. The current 83% that equals the average occupations of 2018 and is only two points from the data of 2019.
From ALA, caution is called for “because recovery cannot be taken for granted.” Weighing against the high price of fuel, $1,000 per metric ton compared to $500 to $600 a year ago. An increase already included in the new coverage on fuel demanded by airlines, which means an increase in the financial cost.
In the meeting with the media, emphasis was placed on the fact that inflation and the rise in interest rates can reduce the disposable income of families to travel. “At the moment there is no impact on reservations, but we also do not have the visibility of the past because customers anticipate less the purchase of tickets,” explained the president of ALA.
And the association has taken advantage of the meeting with the media to reiterate the urgency of withdrawing the compulsory use of masks on board the planes. “Spain is already the only country in Europe that requires this and one of the few that remain in the world,” says Javier Gándara. His claim is that the area be separated from the rest of public transport, in the application of this sanitary requirement, due to the capacity of the ventilation systems and filters of the planes to create an environment clean of viruses.
Spanish airlines are obliged for their travelers to use masks during the entire duration of their flights, while international airlines that depart from or arrive in Spain only have to ensure this obligation while transiting through Spanish airspace. With this, a grievance is created for travelers in companies of Spanish nationality such as Iberia, Air Europa, Vueling, Air Nostrum, Volotea, etc.
The Spanish air sector will unite with Portugal, Italy and Greece to stop a fuel tax