BA and Virgin seek carbon trading permits boost
03.05.11
British Airways and Virgin Atlantic have appealed to the EC for special treatment in the allocation of carbon permits. The permits will be based on the amount of carbon dioxide released last year, which will mean UK airlines will get fewer permits because UK airspace was closed for 6 days last April due to the Icelandic the ash cloud. Airlines on the Continent were less affected and some Southern European airlines were able to operate normal schedules.
Under the emissions trading scheme companies are allocated a set number of permits every year. If they emit too much carbon, they must buy additional permits in the open market. Those businesses that cut emissions can sell spare permits. Airlines will be included in the scheme from next year, with initial permit allocations based on 2010 emissions, but BA and Virgin have asked the EC to take account of the ash cloud.
BA will also be penalised because it suffered 22 days of disruption due to strikes by cabin crew in 2010. The airline had to cancel many flights, reducing the amount of carbon it emitted in comparison with this year.
In total, the scheme will cost airlines more than €300 million in the first year. This will rise to €600 million by 2014 and could hit €1 billion if the price of carbon increases. Airlines will look to pass additional costs on to passengers, so expect to pay more for flights.
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