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SAA adds voice against EU’s airline carbon tax

posted May 12, 2011, 1:25 AM by Rowan Hewitt

SAA  (53.50 ↓-2.83%) has sent written objections to the carbon trading scheme that the EU intends to introduce early next year, which will effectively tax the airline’s long-haul flights to Europe without any apparent benefit to the environment.

The International Air Transport Association (Iata), to which SAA belongs, is already fighting the proposed tax on behalf of all airlines.

Dileseng Koetle, SAA’s acting head of corporate affairs, said SAA believed the scheme was unfair because it taxed airlines on the whole journey, from the point of take-off until the return, when only a small portion was actually taking place within the EU, which is South Africa’s main source market for incoming tourism.

“The proceeds from the carbon tax are being collected to be placed in the general fiscus of the EU. The funds are not being earmarked for any environmental programmes,” he said.

“The cost to SAA is complex to quantify as it is dependent on the carbon credit amounts paid by the airline, which we will be forced to purchase on the open carbon markets.”

She said it might also mean that SAA would be “subject to double (and more) taxation when South Africa introduces its own carbon taxes and other African countries which we overfly introduce their own taxes and we are liable for EU taxes for the same journey”.

Koetle said SAA had implemented various operational measures to cut pollution by using less fuel and was working closely with local aviation partners to reduce greenhouse gas emissions. “In addition SAA is investigating numerous programmes to reduce emissions and to contain and reduce our carbon footprint.”

Gidon Novick, the joint chief executive of Comair, which has announced plans to fly between Durban’s King Shaka International Airport and Gatwick in London from next year, said airlines were already very heavily taxed.

Giovanni Bisignani, Iata’s chief executive, said last week that he thought the EU would be prevented, on legal grounds, from introducing the carbon trading scheme in its present form because it had no legal right to tax airlines on emissions outside its own air space.

Bisignani has written to Finance Minister Pravin Gordhan asking him not to introduce a proposed tax on carbon emissions in South African air space because it would harm the domestic tourism industry, which the government had identified as important for the creation of new jobs.