Title: Airlines say fares will go up under ETS (at The West Australian 26.12.2009 at page 13)

(sorry I could not find the online version, so have only included parts of the article)

Domestic passengers face higher fares to cover the estimated $100 million cost of airlines’ greenhouse gas emissions if the emissions trading scheme is passed by Parliament next year, airlines warn…

Qantas and its low-cost sibling Jetstar says by 2012 they could be looking at an extra $50-$60 million in emissions costs to comply with the scheme and new emissions schemes in NZ and EU…….

The emissions scheme would cost Virgin Blue $50 million to $70 million, according to the arilines’ chief executive , Brett Godfrey……

Comments – I am thinking why can’t airlines be more proactive ? For example designing a plan/promotion to encourage its customers to reduce their carbon footprint and channel accumulate those fly credits to setoff in carbon credits ? The airlines could negotiate some arrangement with the government to modify JI to share credits with their customers. In this way, the airlines could use this situation to guide behavior changes of their clients and to earn somePR by involving its clients and environment in the same breath.

Alternatively, they could get into the market now and buy some CERs on the cheap. They could also do some CDM with non-Annex I countries and pick some CERs also on the cheap. Airlines could do a lot but whining is not one of them.

I also check Qantas’s Annual Report for 2008 and this 50 million is a drop in the ocean as compared to its 14 Billion in expenses (30 June 2009) or 0.4 %. ( http://annualreport.qantas.com.au/assets/pdfs/QantasFinancialReport200902IncomeStatements.pdf )

By footing this $50 million by buying CERs on the open market, the airlines could even write this off as expense or alternatively create new solutions to reduce their own carbon footprint (the costs here could also be write-off as R&D, investments in new equipment etc), researching in green fuels, optimising flight plans, buy fuel efficient planes, reduce the weight on board, etc.

Even if there is a complete failure to reduce their own carbon footprint, by simply transferring the cost to its passengers (Qantas has 25 million clients in June 2008), the max cost to each client is merely 2 dollars only (or the costs of a cup of coffee at the airport lounge). The ETS can never be used as a reason to hike price for profits.

CK