European Union Carbon Tax To Face A Mounting Battle From Countries And Airlines Around The World by Kane Minks

European Union on World Map. Kane Minks

by Kane Minks

The EU airline carbon tax may soon crash to the ground as a coalition of powerful nations threatens to launch a trade war against the European Union. Russia, China, America and India have formed an anti-carbon tax coalition to oppose the EU carbon tax and are planning retaliation against the EU if it doesn’t back down.

The EU’s Emission Trading Scheme (ETS) demands that carriers flying into European airspace pay a tax on carbon emissions. The law came into effect at the beginning of the year. The ETS requires all airlines to give the EU emission data so that a tax can be calculated and collected. Many airlines have told the EU to go fly a kite.

The airlines in the U.S. have requested that President Obama stop the EU action by filing an Article 84 complaint at the UN’s civil aviation governing board, which is called the International Civil Aviation Organization (ICAO). The U.S. airlines, which are represented by Airlines for America, said that an Article 84 action would create a global framework for dealing with carbon emissions. This UN mechanism allows nations to settle disputes.

Eco-fascists and the head of the ICAO oppose the Article 84 action, claiming that the process would gum up the effort to charge passengers and the airlines a tax as soon as possible. The UN and the EU could realize tens of billions of dollars from this carbon scam. The Eurozone, with a number of countries facing imminent economic collapse, is engaged in desperate schemes to prop up their falling house of cards.

Meanwhile, the U.S. Congress is getting into the act by writing a bill that would shield U.S. airlines from the EU carbon scheme. Senator John Thune, a republican from South Dakota, and Senator Claire McCaskill, a democrat from Missouri, have co-sponsored the bill.

Internationally, the EU is standing alone on this carbon scheme and facing severe consequences if it goes ahead with this tax. The U.S. has called this carbon scheme an attack against its sovereignty. The government of India has formally backed its airlines and their decision not to give the EU any carbon data. China has threatened the EU with a trade war. Punishment against the EU could include limiting flights from Europe and refusing to buy aircraft from European manufacturers.

Under the EU carbon tax scheme, passengers will be expected to pay a punitive tax on every ticket they buy. This will increase airline travel expenses and make Europe a less desirable destination for tourism and business. The world is trying to save the EU from its’ big mistake.

Kane Minks

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Spirit Airlines hit with lawsuit over fees – Business – MiamiHerald.com by Kane Minks

English: Spirit Airlines N587NK (an A321-231) ... Kane Minks

Spirit Airlines hit with lawsuit over fees – Business – MiamiHerald.com.

Kane Minks

Interesting story. Spirit is an Ultra Low Cost Carrier that makes their profits from exorbitant fees. The only thing included in their basic ticket price is the seat and the ability to carry on one personal item (like a purse or backpack). Everything else incurs a fee. This lawsuit is in reference to a certain fee they have been charging their customers for years. Their passengers love to hate them for their fare structure, but in the end they always come back. They simply offer the cheapest fares to some of the most popular destinations in the U.S., Central America, and South America. A Spirit Airlines Case Study will follow shortly……

 

Kane Minks

The Foundation of Low-Cost Air Carrier Price Structures prior to Airline Deregulation in the United States by Kane Minks

by Kane Minks

The U.S airline industry has come a long way from the days of government regulation and oversight.  In the November 1964 Air Transport World article “Let’s not give the store away!” many of the top minds in aviation at that time shared ideas and viewpoints on what the future may hold for aviation.  They may have speculated, but really had no idea what was to come.

Before U.S. airline deregulation, those in the aviation world continued to wonder what might become of their ever-changing industry, in the age of airline regulation.  Many domestic and international airline fare structure strategies were considered, including the implications of price elasticity.  The thought of overzealous marketers moving toward low-cost structures had many in the U.S. fearing the industry would head in the wrong direction.

The domestic and international markets were headed in two totally different directions.  The low-cost fares of the international airline market made sense since these fares provided greater load factor by increasing passenger volume.  At the same time, the U.S. domestic market was not yet convinced since they could not find the optimal point of price elasticity; whether or not fares should be increased or lowered and the point where passenger traffic would be reduced.

Many airlines grew frustrated with dull and unproductive fare structures in a regulated environment.  Low-cost and special advanced fares seemed to be the rational direction for airlines.  Passengers may have been paying different fares, but airlines could expand the market to price-sensitive passengers and others not flying.

The fears of discounted fares were largely based on what happened after the U.S. World Wars in the electronic housewares industry.  Americans were war-weary and found a new ability to buy.  There was a huge demand for goods.  Companies sought to beat out competitors by expanding production.  Supply outgrew demand and sales began to drop.  Conventional and discount retailers alike began to suffer.  Price wars erupted to capture as much of the remaining demand as possible, which slashed company profits.  Similarly, airlines had an over-supply of seats to fill, but adjusting fare structures set to reshape the airline industry for good.

The low cost fares and price wars of today are making flying increasingly accessible to people around the world.  Airlines that cannot afford to wage price-wars have to find new and unique ways of attracting business.  Customer-service, incentives, technology, and the overall travel experience are ways some airlines are gaining steam to retake market share from low-cost airlines. Some of these strategies have proven successful in regaining market shares.  Many things will continue to change.  The highly dynamic world of aviation around the globe will further shift and evolve as new strategies and factors appear. What the future holds for airline price structures may rely more on fees and less on volume.  Only time will tell.

delta dc aircraft regulation structures Kane Minks

Delta DC-6

A retrospective from Air Transport World’s “Let’s not give the store away!” November 1964

Kane Minks