Could a frequent flyer tax happen? What a UK proposal could mean for avid travellers

Mar 31, 2021

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Climate change is a problem the entire world is struggling to address. Now there are growing calls in the U.K. to implement a “frequent flyer tax” on the people who spend the most time on aeroplanes.

Activist groups such as Greenpeace are throwing their support behind a proposed levy on air passengers because they say in countries with high levels of aeroplane emissions, it’s a small portion of the population — elite travellers — that does the most damage.

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A new report from the climate campaign organisation Possible, the group that called for the tax, says 15% of the U.K. population takes a whopping 70% of the flights to and from the U.K. Those numbers skew even higher in other countries.

In the U.S., 12% of people account for two-thirds of air travel. In France, 2% of the population take 50% of flights. And in India, nearly half of all flights are taken by just 1%  of households.

Because frequent flyers typically earn higher incomes, the numbers suggest the wealthiest people are causing the most damage to the world’s climate via air travel. While there are no countries with specific taxes on frequent flyers, climate change is a problem that is becoming harder to ignore. With many experts expecting air travel to begin its slow rebound by the end of 2021 after the pandemic crippled the aviation industry, activists are urging government leaders to take action now. What does that mean for avid flyers?

The Frequent Flyer Levy, as it is called, would be a progressive tax that increases as a person takes more trips or travels longer distances by air. It’s designed so as not to penalise families that take the one annual holiday. Given the huge disparity in air travel in the U.K. where 85% of residents fly no more than two flights annually, those targeted by the tax would be business travellers and avid aviation fans.

Which brings us to an especially controversial aspect of the proposal in England: The call to end airline loyalty programmes.

“Taxing frequent flyers is a good idea — but we also have to do something about air miles, which reward frequent fliers for flying more frequently,” John Sauven, executive director of Greenpeace, told the BBC. “This is obscene during a climate crisis — and it should be stopped.”

The odds of airlines ending their frequent flyer programmes are slim to none, especially with business travel not expected to rebound fully for several years as a result of the coronavirus pandemic. The programmes are incredibly valuable to the industry, and not just in terms of customer retention. They are basically essential assets, and it was especially true in 2020.

As revenues plummeted due to the coronavirus, the top three U.S. carriers — Delta Air Lines, United Airlines and American Airlines — used their frequent flyer programmes to borrow $25 billion to navigate the financial difficulties.

A big reason those rewards programmes are such vital assets to airlines is that they’re mostly immune to slumps in travel, as members earn points in the air and on the ground. The airlines then sell those points to partner businesses, such as cobranded credit card issuers. The business model works because the revenue earned from selling points to credit card companies and other partners is greater than the cost of flight redemptions and upgrades.

Related: How much money do loyalty programmes make airlines?

A government official quoted in the same BBC story did not comment specifically on calls to end loyalty programmes. However, he did point out that frequent flyers already pay more under the Air Passenger Duty system, which levies charges based on the distance of a flight and what cabin the traveller is in, meaning international travellers already pay more.

Related: Flying from the UK is about to get more expensive because of Air Passenger Duty increase

A tax on frequent flyers is a long way from becoming a reality. Privacy concerns and practical implementation are just two complications that would have to be resolved. Airlines have argued in the past that a more effective way to reduce emissions is through the creation of more efficient aeroplanes and cleaner fuel.

The industry will no doubt fight any plans for a levy. And, of course, travellers who live for the thrill of hopping on a plane to visit a new destination will likely want their say.

Featured photo by guvendemir/Getty Images.

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