Budget airline bosses criticize increasingly heavy regulation

LONDON_Low-cost airline chiefs criticized increasingly heavy regulation and taxes on Tuesday, claiming they are unfairly carrying the burden of concerns about the impact of flying on the environment.

EasyJet Chief Executive Andy Harrison led calls for a change to regulation of the industry by proposing a new taxation system for Britain that would charge airlines based on the efficiency of planes and the distance traveled.

Harrison said that most budget airlines were more efficient than the traditional carriers because their fleets were newer and more fuel efficient.

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

John Hanlon, secretary general of the European Low Fares Airline Association, said that the growth of the low-cost industry had opened up air travel "from the prerogative of the wealthy few to something that everybody can contemplate."

Low-cost carriers were also broadening the financial community by allowing staff from smaller businesses to travel, Hanlon said.

Statistics from the Official Airline Guide show that low-cost flights now account for 16 percent of flights and 20 percent of all seats worldwide, up from 14 percent and 17 percent a year ago.

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.

Hanlon said that industry growth in Europe had been facilitated by deregulation a decade ago, but tightening rules were threatening further growth.

"We need to be vigilant we don't become progressively re-regulated almost by stealth," he said.

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

Harrison acknowledges that global warming is a "clear and present danger" that requires "intelligent debate."

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

Harrison said Tuesday that the air passenger duty introduced by the British government 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 load factor and the aircraft type.

"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."

Harrison said that easyJet passengers would pay less under the system the carrier proposes because its fleet of 137 planes has an average age of 2.3 years, making them "greener" than fleets of rival full-cost carriers.

However, Virgin Atlantic Airways has said it wants to retain the APD for short-haul flights while 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. Harrison has said that easyJet would support the plan only if it included all flights in and out of Europe.

Hanlon said that around 12 percent of emissions in the European Union could be cut further with consolidation of traffic control.

More than 130 airlines are meeting in London over two days to discuss a range of issues from regulation to fuel prices.

On competition issues, Harrison criticized EU regulations that require airlines to compensate passengers when flights are delayed.

"Eurostar can cancel as many trains as they like with no regulation," he said.

In the Asia-Pacific, Tiger Airways Chief Executive Officer Tony Davis said the biggest challenge was related to infrastructure with large airlines like Qantas also in charge of passenger security at airports across Australia.