03/28/2011

The Learjet Levy proposal did not fly!

A UK proposal to replace the "per passenger" tax on air flights by a "per plane" tax had to be dropped due to EU legislation.

 


The aim of replacing the "per passenger" flight tax by a "per plane" tax, based upon the maximum takeoff weight of the plane, had considerable support in the UK. It would penalise flights with no passengers (including cargo flights!), ones with very few passengers (business jets with a small number of affluent passengers) and transit passengers, but benefit airlines whose flights are regularly full. Perhaps surprisingly (to some), easyJet were quite in favour of it, being quoted as saying

If this were to be true we would be very disappointed. A per-plane tax is both a fairer and greener tax.

Unfortunately for its proponents, it had to be dropped because lawyers claimed that it was effectively a breach of the 1944 Chicago Convention, which outlaws fuel taxes on international flights. Strange, you might think, but the argument is that the fuel is directly linked to the maximum take-off weight of an aircraft.

In the opinion of many environmental associations, this provision of tax-free fuel for aircraft is unjust, giving the airline industry an advantage over other forms of transport which do have to pay fuel tax. As such, it is sometimes regarded as an incentive to pollute.

It is true that flights internal to a country can be made to pay a fuel tax if the countries so decide. Back in November 2009 the Swiss citizens approved a federal decree on using aircraft fuel taxes to provide special funding in air transportation. However, given the strength of the aviation lobby, it is hard to imagine any change in the status quo for many years.

I have to admit that I find it slightly illogical that the cargo flight to China, in a quiet (!) Boeing 747, pays nothing for its cargo, whereas it would pay several thousand Swiss francs if it were carrying passengers. I also find it annoying that the number of commercial business jet flights (ones that you can hire if your bank account is large enough) is around 20'000 per year, with an average of 2 passengers per flight, and thus will only pay about 50 CHF per flight. As for the company-owned private jets, with about the same number of flights per year, it is not obvious to me if they pay anything. Certainly, in the UK, these latter flights have not been taxed at all!


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