Frequent flyer tax would punish the rich to tune of €64bn per year

Posted by Admin October 17, 2024 Travel

A levy would keep flights cheap for occasional flyers while making multiple flights in a year much more expensive.

Europe’s most frequent flyers having to pay a tax every time they take a flight could raise billions, new research has found.

A frequent flyer tax could raise €64 billion and slash emissions by a fifth, according to a new report from environmental campaign groups Stay Grounded and the New Economics Foundation (NEF)

The tax would rise with each additional flight taken by an individual in a year.

90 organisations and 47 academics, including Greenpeace and ActionAid International, have given their support to the idea.

Why should frequent flyers be taxed more?

Currently, everyone who flies pays the same amount of aviation tax in Europe.

“It doesn’t matter whether you’re flying to visit your family for the first time in years, or taking a tenth annual flight to your luxury house on the coast – you’ll be paying the same tax for that flight,” explains Magdalena Heuwieser, an aviation campaigner at the Stay Grounded network.

“A frequent flying levy would be a fair aviation measure, reducing excessive flights for wealthy passengers, while raising revenues – including to expand and provide affordable railways and public transport.”

It could also help to even the playing field for greener forms of transport.

“Right now, air travel is artificially cheap thanks to subsidies and tax breaks that aren’t extended to lower carbon transport like trains,” explains Cat Jones, a sustainable travel expert and founder of flight-free travel company Byway.

“A Frequent Flyer Levy could help reduce the demand for flights – especially where there are fantastic ground-based alternatives.” This could slash aviation emissions by 21 per cent, she adds.

Poll results in the report show that 52 per cent of respondents in Western Europe don’t fly at all in any given year, while just 11 per cent of people fly more than three times a year.

This is heavily skewed towards the wealthy: 35 per cent of households earning over €100,000 take three or more return flights a year versus just 5 per cent of households earning less than €20,000.

“Only by targeting this tiny minority of air travellers can we reduce our climate impact while maintaining access to the most valued services that air travel provides to the rest of society,” says Finlay Asher, an aerospace engineer in the aviation industry.

How would the frequent flying levy work?

The report proposes a frequent flying levy which would apply increasing levels of tax to each flight a person takes in a year. It would be added to all trips departing from the European Economic Area (EEA) and the UK, excluding the first two journeys.

The report also suggests a surcharge for the most polluting journeys: medium- and long-haul flights, as well as business and first-class seats.

For the first and second flights taken in a year, a €50 surcharge would be applied to medium-haul and €100 to long-haul, business and first-class flights.

For the third and fourth flights, a €50 levy would be added to every ticket plus an additional €50 surcharge for medium-haul and €100 for longer distances and comfort classes.

For fifth and sixth flights, the levy would rise to €100 per flight, plus the additional surcharges. For seventh and eighth flights the levy would be €200, rising to €400 for every flight thereafter.

This would keep occasional flights for lower income groups affordable while targeting excessive pollution caused by wealthy frequent flyers.

What would a frequent flyer tax pay for?

The levy would represent a six-times increase in European aviation tax revenues – equivalent to around 30 per cent of the entire EU annual budget.

The extra revenue generated through the EU alone (€51bn) could fund 20 per cent of the annual public investment needed for the EU to meet its climate targets, the report estimates.

“When it comes to stopping climate breakdown, Europe faces a huge gap in the finance available,” says Sebastian Mang, senior researcher at NEF.

“A frequent flying levy could make a sizeable contribution to the EU’s funds and could be leveraged to generate hundreds of billions in capital for investment in public transport, wind and solar power and nature restoration,” he proposes.

“At the same time, a portion of the funds should be ring fenced for the EU’s contribution to lower and middle-income countries dealing with the sharp end of the climate crisis.”

Unlike other modes of transport, aviation is currently highly subsidised. The report recommends that aviation’s current exemption from fuel tax and VAT be scrapped.

“It‘s high time democracy uses this last force of human nature to harness the unnecessary destruction that my class’s jet-setting causes and to effectively demand we contribute to the costs of saving this planet,” says Marlene Engelhorn, Austrian millionaire and founder of taxmenow.eu, an initiative of wealthy people actively working for tax justice in Germany, Austria and Switzerland.

How could a frequent flying levy cut aviation emissions?

A frequent flying levy could result in a 21 per cent drop in aviation emissions, the report estimates. This would mainly result from just 5 per cent of people – the most frequent flyers – flying less due to the policy.

“Immediate reduction of carbon emissions is necessary to align the aviation sector with the goals of the Paris climate agreement,” says Stefan Grebe, author of the CE Delft economic modelling study commissioned by Stay Grounded to calculate the potential impact of the levy.

“Otherwise aviation is likely to contribute to an overshoot of the remaining carbon budgets and in addition requires disproportionate amounts of clean energy and land or depends on uncertain technological breakthroughs.”