Is It Time to Charge Passengers the True Cost of Flying?

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CC BY 2.0. Ready go fly from Haida Gwaii/ Lloyd Alter

If it weren't so subsidized, it would be a lot more expensive, and people might fly a lot less.

When you fill your car at a gas pump, a big portion of the price goes to taxes. There are state taxes that are as high as 58 cents per gallon in Pennsylvania and federal taxes of 18.4 cents per gallon.

But airlines do not pay a penny of tax on jet fuel, thanks to a treaty signed in 1944 that the airlines have fought to preserve. If it was taxed like other fuels, it would add about a hundred bucks to the price of a transatlantic flight.

LaGuarida Airport rendering

© HOK/ LaGuardia Airport renovation

If you fly that plane into La Guardia, you are landing at an airport going through a $4 billion renovation, half of which is being paid for by the taxpayer through the Port Authority.

If you are flying in a Boeing jet, you are in a plane that was built on subsidies. According to Erica Alini of Global News, "The company received $457 million in federal grants, which are typically non-repayable, between 2000 and 2014. In addition to that, there was a whopping $64 billion in federal loans and loan guarantees." The company also got $13 billion in state and local subsidies. Meanwhile, Boeing complains to the World Trade Organization that Airbus got $22 billion in illegal subsidies from the European Union.

Airplanes now drink five million barrels of oil every day and are the cause of 2.5 percent of global CO2 emissions, but the effects of those emissions might be much higher. John Gibbons of the Irish Times calls aviation "the red meat in the greenhouse gas sandwich", noting that there are 10,000 passenger aircraft in the sky carrying over a million people every day.

No other discrete human activity is more intensely polluting than flying. Yet rather than being hammered, the aviation industry instead benefits from tax breaks and subsidies other sectors could only dream of.... Rather than being penalised for their massive carbon footprint, frequent flyers are instead pampered by airlines with upgrades and incentives.

Gibbons thinks that raising the prices just penalizes people with lower incomes, so that flying should be rationed.

rationing poster

Rationing Poster/Public Domain

The real point of rationing is not to raise revenue but to constrain demand, and vast amounts of the flying we now do is frivolous in the extreme. Irish people think nothing of having their wedding in Dubai, or stag parties in Berlin, confident the (relatively) low fares mean their family and friends will join them for a celebration that could as easily have been held locally.

I am not so sure about rationing, and wonder what is wrong with the good old free market. Stop all subsidies, and tax jet fuel at the same rate as any other fuel.

C-series jet

Bombardier C-Series Jet/ Lloyd Alter/CC BY 2.0

The first time I got on a Bombardier C-series jet (now an Airbus A-220), I joked that Canadian taxpayers should fly free, given the level of support and subsidy the plane had received. But it is the same everywhere in the world – the airports, the highways and trains to the airports, the planes and the fuel, all hugely subsidized or exempted from taxes that everybody else pays, which is in essence a subsidy.

Charge the customer the full cost of flying and people would do it a lot less.