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Friday, June 14, 2024

Debate takes off over airline tax

Cheap airline tickets to New York and other destinations, airport expansion plans and the government’s proposal to impose a new airline tax per seat have sent the climate debate flying in Norway this week. At stake are environmental, business and political issues involving support for outlying areas in the country, and the turbulence is bound to continue.

The metro station at Oslo's National Theater stop was plastered during the weekend with ads for Norwegian Air's low-fare flights to New York, just climate negotiators were gathering in Paris. Airline travel is widely considered to be a major generator of carbon emissions, but a new tax aimed at curbing air travel has met howls of protests. PHOTO:
The metro station at Oslo’s National Theater stop was plastered during the weekend with ads for Norwegian Air’s low-fare flights to New York, ironically just as climate negotiators were gathering in Paris. Airline travel is widely considered to be a major generator of carbon emissions that the negotiators need to cut, but a new tax aimed at curbing air travel has met howls of protests in Norway. PHOTO:

The debate really took off when the new tax emerged from the government’s budget negotiations with its two support parties, the Liberals and the Christian Democrats. It calls for the airlines to start charging an extra NOK 88 (around USD 10 at current exchange rates) per seat per flight from April 1, and it was demanded by the Liberal Party as an environmental measure aimed at making it at least slightly more expensive to fly, to dampen demand.

The airlines and some airport administrators are roaring, as is the national aviation employers’ organization NHO Luftfart. They claim the tax proposal amounts to little more than “symbolic politics,” that it’s “not serious” and that it will only have minimal if any environmental benefits. They’re especially playing the “district politics” card in Norway, traditionally aimed at pitting outlying areas against the cities, where there are more options available for just about everything, not least transport.

“A clique of politicians living within cycling distance of the Parliament has decided that we should impose a tax of NOK 2 billion that means we turn our backs on Northern Norway and the northwest coast, which also face major economic and industrial challenges,” complained Torbjørn Lothe of NHO Luftfart during a live debate on NRK’s national debate program Politisk kvarter Tuesday morning.

The Rygge airport at Moss is served almost entirely by Ryanair, which has come under severe criticism by labour organizations and politicians this week. Now state authorities are vowing a full review of Ryanair's operations in Norway. PHOTO: Moss Lufthavn Rygge
The Rygge airport at Moss has warned it may even be forced to close, if the airlines serving it (mostly low-fare carrier Ryanair) drop routes because of a proposed airline seat tax of NOK 88 (USD 10.23).  PHOTO: Moss Lufthavn Rygge

The airlines are already threatening to cut their routes to some of Norway’s most far-flung destinations, because of the tax that effectively will boost airfares. Officials at the Rygge Airport in Moss claim they may even need to shut down if the airlines serving it (mainly Ryanair) withdraw. Cut-rate carriers like Ryanair often advertise basic airfares that are lower than the tax alone, and Ryanair has warned that the tax will have consequences for its routes.

At the Torp Airport in Sandefjord, officials are unhappy that the Hungarian low-fare airline Wizzair has reported that it will drop its route between Torp and Tuzla in Bosnia-Hercegovina because of the tax. Wizzair also is cutting its departures to Gdansk in Poland, reported newspaper Aftenposten, while Norway’s regional airline Widerøe has announced it will drop its summer routes from Torp to Bodø and the Evenes airport, which serves Harstad and Narvik in Northern Norway.

‘Crisis meeting’
The airlines had what was billed as a “crisis meeting” with transport ministry officials on Monday afternoon, at which airlines SAS and Norwegian also warned of route cuts, not least to airports like Alta and Kirkenes in Northern Norway. Anne Sissel Skånvik, communications director for Norwegian Air, claimed the tax won’t have any environmental effects because Norwegian will merely redeploy the aircraft to other, more profitable routes. Norwegian is in the midst of a major long-haul route expansion, and ironically was promoting among the lowest fares ever offered from Oslo to New York just as the environmental tax debate broke out. Norwegian has long claimed its fleet of mostly new aircraft, however, is also among the most environmentally friendly in the skies.

The Liberal Party was taking much of the heat over the new airline tax, since the party proposed it, but its deputy leader Ola Elvestuen was unrepetentant. “This criticism is very special in light of the climate negotiations going on in Paris right now,” Elvestuen noted in the NRK debate Tuesday. “We need to motivate people and the country to reduce carbon emissions, and yet here come claims that individual decisions to fly less don’t have any effect. Of course there will be lower emissions if there are fewer flights.”

OSL expansion avoided climate debate
The environmental arguments and climate concerns are also now part of some current, albeit delayed, debate over the billions of kroner the state is spending on major airport expansion projects at Oslo Gardermoen (OSL), in Bergen and elsewhere in Norway. The huge OSL expansion project seemed to avoid much opposition when it was launched in response to huge passenger traffic growth just 13 years after OSLO opened in 1998. Rasmus Hansson, a Member of Parliament for the Greens Party, recently has been among the few politicians questioning the wisdom of such expansion, to accommodate an industry that’s long been considered a major emissions generator.

The Oslo airport expansion is on schedule, greatly anticipated by the airlines and passengers using Gardermoen, and far beyond the point of no return, but an NHO proposal to also build a third runway at OSL this fall prompted Hansson to call it “one of the dumbest and most irresponsible transport projects in Norway.” Hansson, writing in a commentary in newspaper Dagsavisen earlier this month, reminded NHO that the Norwegian government and the Parliament have committed Norway to cutting its overall carbon emissions by 40 percent during the next 15 years. “One of the most important sources of emissions in Norway is the transport sector,” Hansson wrote. Expanding Oslo’s airport even more, with a third runway, is like “planning to fail” to meet Norway’s climate goals, he claimed.

Jobs at stake
Hansson also debated the proposed airline seat tax on NRK’s nightly national newscast Dagsrevyen on Monday, up against NHO boss Kristin Skogen Lund. He held fast that a tax of NOK 88, however modest, can help discourage all the flying that Norwegians do these days. Lund and her NHO colleagues claim it will threaten thousands of jobs and unfairly tax the residents of places like Alta and Narvik, who don’t have access to trains or many alternate forms of transport. Lund also argued that the tax will in many cases need to be paid by businesses already struggling since the dive in oil prices. Forcing the airlines to shift over to biofuels, Lund claimed, would be a much better way of making airlines more environmentally friendly than taxing them.

Neither the government nor its lead party, the Conservatives, gave in to the criticism from NHO, the airlines and airports. Transport Minister Ketil Solvik-Olsen of the Progress party listened to their arguments, and there will be a round of hearings on the tax proposal, but both Solvik-Olsen and the finance policy spokesman for the Conservatives, Svein Flåtten, claimed the tax would take effect from April 1.

“I never in my wildest fantasies would have believed something like this,” Lothe of NHO fumed on NRK Tuesday morning, “that the Conservatives and the Progress Party would become parties promoting taxes and fees on aviation.” Berglund



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