Researcher Exposes Real Costs of Flying

Professor Renate Schubert believes flying is quite cheap. Air tickets would be more expensive if fuel tax, value-added tax (VAT), and CO₂ tax were charged. Also, there would be fewer fabricated incentives.

You are very familiar with the temptation of cheap flights—a quick trip to London for the weekend, or a trip to New York for a little bit of Christmas shopping. But the downside is that flying compromises the global climate. However, in most countries, it is inexpensive to fly these days that people do so more now than in the past. Exactly why is that?

At the climate’s expense

Look at Switzerland for example. Here, international flights are excused from fuel tax, but in the automotive industry, there is a tax on petrol. Furthermore, air travel is exempt from CO₂ tax and has no restrictions on emissions. Finally, air passengers do not have to pay the VAT that is applied to all other commercial dealings.

All this makes certain that airfares stay very low compared to other means of transport. You can, for instance, fly from Basel to Berlin for just 31.20 francs, while a standard (undiscounted) second-class train ticket costs 178 francs.

Would train travel become economically competitive if surcharges were enforced on flying? It would surely be more ecological, for while the Basel to Berlin flight releases about 180 kg of CO₂, a train journey over the same route only discharges around 20 kg.

Calculation for Basel to Berlin

The single, economy class flight from Basel to Berlin (Schönefeld) costing 31.20 francs, covers a distance of 690 km. As projected by the German aviation authority, if average fuel consumption was 5.52 liters per person per 100 km, then fuel consumption would be approximately 38 liters per person. Based on the fuel tax on domestic flights of 0.74 francs/liter, a surcharge of 27.90 francs would then be incorporated into the airfare.

For the CO₂ tax, the values of the Federal Office for the Environment and the CO₂ Act are taken as guidelines to arrive at 96 francs/ton CO₂. The CO₂ emission of the flight in question can be estimated at 0.18 tons, for various types of aircraft and load factors. As a result, the CO₂ surcharge is 17.20 francs, which takes the total airfare cost to 76.30 francs.

Then VAT at 7.7% would have to be applied to this total—an extra 5.90 francs, making the total price to go up to 82.20 francs. Now, the “new” airfare is 2.6 times higher than the original one. If, say, a ticket charge was also taken into consideration, as is the case at certain European airports, the factor would be even bigger. Therefore depending on the original price, you could expect to pay a total of two to seven times the present-day ticket price—and that’s a radical increase!

If we want to reduce flying, surcharges on airfares are certainly a step in the right direction.

Renate Schubert, Professor, ETH Zurich.

Still, this new fare is only half as much as the price of a standard (undiscounted) train ticket. The price inconsistency has something to do with the variances in infrastructure costs between the two systems: the construction and upkeep of rail networks have a huge impact on the price of train travel. However, market factors also seem to be crucial. While air travel is an extremely competitive market, which is seen in low prices for consumers, train travel is mostly more monopolistic, and ticket prices are correspondingly high.

Setting price signals

If you want to minimize flying, or at least stop it from increasing, surcharges on airfares are definitely a step in the right direction. However, just recently the Environment Commission of the National Council opposed a CO₂ levy on airline tickets.

People cannot depend only on the effectiveness of price signals; Professor Schubert is convinced people also have to embrace a new approach to air travel. Do you really have to go to New York for Christmas shopping just because it is very cheap? Anything that is helpful in making consumers ponder long-term will help here.

Source: https://www.ethz.ch/en