Eight nations unite to propose taxing premium class fliers, sparking airline industry anger

An eight-nation coalition has been formed with support from the EU and the Global Solidarity Levies Task Force (GSLTF) to propose a levy on premium air travel, as global scrutiny intensifies on climate damage caused by aircraft emissions. France, Kenya, Barbados, Spain, Somalia, Benin, Sierra Leone and Antigua & Barbuda announced their collaboration during the UN’s fourth International Conference on Financing for Development (FFD4), which has just concluded in Seville. Their initiative proposes levies on First and Business Class air tickets and private jet operations to help increase aviation’s contribution to mitigating the impacts of climate change, particularly in developing nations, and cites an estimation in a study by Netherlands-based environmental consultancy CE Delft, commissioned by the GSLTF, that levies could generate €78 billion ($90bn) per year. IATA has heavily criticised the move.

“New levies on premium flyers can raise vital funds for climate and development,” said Laurence Tubiana, co-lead of the Global Solidarity Levies Task Force Secretariat, which was established in November 2023 during the COP28 summit in Dubai, and is co-chaired by France, Kenya and Barbados. Tubiana, who is also President and CEO of the philanthropic European Climate Foundation, said the latest initiative was “proof that we can make progress.” 

But the plan has enraged IATA, which says the proposal “reveals severe deficiencies” in that it lacks meaningful detail on the economic impacts of the levy, that it provides no certainty that the funding will be used for climate mitigation projects, and that it fails to take into account a climate financing mechanism for aviation already exists in the form of the CORSIA international carbon offsetting scheme.

“The airline industry is an economic catalyst, not a cash cow,” said IATA’s Director General, Willie Walsh. “Yet governments casually suggest a tax on flyers that is three times the airline industry’s annual profit without considering the real-world side effects for an industry that is a lifeline for remote communities, invigorates tourism markets and links local products to global markets.

“While the modalities for the GSLTF proposal are not specified, history shows us that these taxes simply go to the general exchequer, with little, if any, of the revenues generated going to climate change adaption.”

ICAO, too, has strongly opposed this and other such initiatives (see article), which it claims will undermine CORSIA as the agreed single market-based measure to help mitigate climate impacts of international aviation.

In April, ICAO Secretary General Juan Carlos Salazar urged the organisation’s 193 member states to “express a deep concern” over independent actions by countries or organisations to fund general climate repair programmes through measures such as taxes on international aviation.

The multi-national coalition formed in Seville wants to highlight premium flyer taxation ahead of the UN’s COP30 Climate Summit in Belem, Brazil, in November, promoting the initiative as an aid to  developing nations in addressing major challenges including climate change impacts.

It calls on more nations to introduce levies on premium flying, including taxing the use of private jets “based on best practices”, and is urging those countries already taxing premium travel to ensure “upward harmonisation” and work on principles for using the proceeds.

“In parallel,” said the coalition, “these countries may explore options for a generalised taxation at international levels, building on current discussions at ICAO on the decarbonisation of the aviation sector.”

“The coalition commits to work towards COP30 on a better contribution of the aviation sector to fair transitions and resilience, with a special focus on premium flyers, in view of investing all or parts of the proceeds into resilient investments and fair transitions,” explained Thani Mohamed-Soilihi, Minister Delegate for Francophonie and International Partnerships of France.

“In our proposal, member states will commit to introduce a ticket levy on premium flyers if they don’t have one, make their ticket levy more progressive for upward harmonisation, and for all countries to introduce a significant tax on private jets. Together, we have to make a difference.”

Speaking at FFD4, French President Emmanuel Macron said many countries were struggling with debt, adding: “We need those that benefited from globalisation to contribute more to financing. We have to mobilise global solidarity levies. We have made progress on maritime, and now on aviation there is a huge step forward. I urge all countries to join this international framework because it is absolutely key.”

Spain’s Prime Minister, Pedro Sánchez, declared “multilateralism is alive” as he pledged his country’s support for “a better contribution of premium flyers,” while Kenyan President William Ruto added: “We cannot keep talking about change without implementing it,” and said political will was needed to progress such plans.

Wopke Hoekstra, the European Commission’s Commissioner for Climate, Net Zero and Clean Growth, also welcomed the opportunity to support the coalition “to work towards COP30 on a better contribution of the aviation sector to fair transitions and resilience, with a special focus on premium flyers.”

The coalition’s pursuit of premium travel levies was welcomed by climate advocacy group Opportunity Green.

“This initiative is a hopeful step forward in improving aviation’s poor record on climate, and we urge other countries to follow their lead,” said the group’s founder and CEO, Aoife O’Leary.

“Aviation has enjoyed unjustified exemptions from basic taxation, like fuel duties and VAT, and remains one of the sectors with the fastest-growing greenhouse gas emissions. The proposal to tax high-emitting luxury air travel is both equitable and reasonable.”

But IATA responded that the airline industry was committed to reducing or compensating for its emissions and argued premium flyer taxes would destroy airline economics, reduce connectivity and impact the very markets which the tax advocates claimed would benefit.

“The bottom line is that, if followed, the GSLTFs recommendations will increase the cost of air travel for all travellers and do more harm than good,” said Walsh.

“Extracting tens of billions of dollars from aviation will cripple its ability to invest in achieving net zero by 2050, change route dynamics to the extent that connectivity will suffer and short-change countries on the critical economic support that air transportation provides.

“The industry is doing everything possible to achieve net zero carbon emissions with sustainable aviation fuels, more efficient operations and better technology. The last thing these efforts need is a $90 billion gut punch of a tax.”

Photo: Malaysia Airlines

Tony Harrington

Correspondent

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