Budget airline heads criticize new rules

updated 4:18 p.m. ET Sept. 18, 2007

LONDON - Low-cost airlines are unfairly carrying the burden of concerns about the environmental impact of flying, executives from budget carriers claimed Tuesday as they criticized increasingly heavy regulation and taxes.

Taxes should be based on the efficiency of planes and the distance traveled rather than being a per-passenger duty, said easyJet Chief Executive Andy Harrison, who has led calls for a change to the regulatory system for Britain.

Harrison said that most budget carriers were more efficient than the traditional airlines because their fleets were newer and more fuel efficient, countering frequent claims that the industry was contributing to climate change by encouraging more people to fly.

"Low-cost aviation is being almost demonized," Harrison said at the annual World Low Cost Airlines Congress. "We are being charged with destroying the planet."

Budget airlines plan to offer more than 58 million seats on more than 392,000 flights worldwide this month, compared with 47 million seats on more than 326,000 flights in September 2006, statistics from the Official Airline Guide show.

The industry's growth in Europe had been facilitated by deregulation a decade ago, said John Hanlon, secretary general of the European Low Fares Airline Association, but tightening rules were threatening further growth.

However, low-cost airlines have yet to form a consensus on how to tackle green issues.

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Ryanair Holdings Group PLC Chief Executive Michael O'Leary has been outspoken in rejecting the notion that aircraft are a significant generator of greenhouse gases. He has said power plants are responsible for a quarter of the world's carbon emissions while aviation accounts for less than 2 percent.

Harrison said the tax that the British government introduced in February to help compensate for damage to the climate from carbon emissions, which imposes a duty on individual passengers, should be scrapped.

The duty, or APD, is not imposed on cargo flights or private jets and ignores the load factor and the aircraft type.

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"You pay the same APD whether flying on new easyJet planes or older Alitalia aircraft," Harrison said. "You pay the same whether the aircraft is 80 percent full or empty."

However, Virgin Atlantic Airways has said it wants to retain the APD for short-haul flights, and British Airways PLC wants to use the duty to offset carbon emissions.

Harrison also supports an EU plan for airlines to join an emissions trading system.

The United States has alleged that such a plan is incompatible with international aviation rules if applied to all air flights in and out of Europe. U.S. officials warned that they could approve the plan only if it was limited to airlines flying within Europe.

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