The frequent flyer levy: frequently asked questions

+ Surely technology will find a way to green air travel soon? Can’t we just use alternatives fuels instead?

Unfortunately there is no technological solution to theis problem in sight. Air travel is slowly improving its efficiency, by about 1.5% each year - but global passenger growth continues to surge ahead at around 5% each year. Electric passenger jets might be possible one day in the distant future but there’s no chance of seeing one any time soon, probably not even in our lifetimes. So far biofuels have been a huge disappointment. Using land we need for food crops to grow feedstock for jet fuel is a fool’s errand, and the biofuels in use today very often have higher ‘life-cycle’ carbon emissions than the fossil fuels they are meant to replace.

Currently, the only way to reduce emissions from flying effectively is to do less flying. That’s what makes this such a tricky problem to solve, and why we want the aviation industry to be realistic about the levels of air traffic possible in the near future, in order to manage the transition to low-emissions transport. This means accepting constraints on demand.

+ But greenhouse gas emissions from flights are a global problem - surely this needs a global solution?

Ideally, yes. But the UN body in charge of tackling this problem, ICAO, has made no progress towards a solution in the entire 26 years since the Kyoto Protocol was introduced. The problem is that ICAO is made up of representatives of national aviation industries - the CEOs of airports and airlines and their colleagues. Because there is no effective technological solution to aircraft emissions, this means the only way to cut emissions from flights is to cut flights. They don’t want to do that because they have built their careers on an ever growing aviation industry. So don’t hold your breath for the UN to solve this problem for us. It’s also true that Britain has a particular problem with flying - we do more of it than the people of any other nation. We decided to include international aviation emissions under the UK’s Climate Change Act - albeit with a uniquely generous target of a more than doubling of aviation emissions from our 1990 baseline - but still haven’t made any plans for how to actually meet this target. The Government’s Jet Zero strategy (2022) only cements unsustainable growth in flights. The frequent flyer levy is a way for most of us to get what we want out of air travel: regular but occasional foreign holidays.

+ What about the EU Emissions Trading Scheme (ETS) - isn’t that taking care of aviation emissions?

Unfortunately the efficacy of the EU ETS has been systematically undermined from the outset by lobbying from high carbon corporate interests. This has led to a huge oversupply of permits which has prevented the ETS from reducing emissions effectively in any sector of the economy, let alone aviation, which has in any case sought and won wide ranging exemptions that mean only a small fraction of European-based flights are now covered by the scheme. It is also important to note that the Committee on Climate Change’s recommendations on controlling passenger demand growth already factored in a working ETS - something that has still not come to pass, and may never now materialise.

+ Is letting everyone have a tax free flight each year really the best thing for the fight against climate change?

The best thing for the climate would be if everyone were to stop flying immediately. Every long haul flight emits as much carbon as everything else a typical person does in a year. But people aren’t going to stop flying. We really treasure the very real benefits that the technological miracle of human flight brings to our lives. So we need to find a way to maximise those benefits while minimising the harm caused. As a society, what we value from flying is occasional holidays to explore the world and escape our sometimes drab and rainy island, plus the economic benefits of international trade and inbound tourism. With this proposal we can protect those things while focusing efforts to reduce flying on the passenger group that is causing the lion’s share of the problem - the frequent flyers.

+ Aren’t you going to get more people flying by giving everyone a tax free flight?

Some people on low incomes would be helped to fly for the first time by this reform. But the modelling shows that by applying a progressively rising tax rate for each flight beyond the first, this small increase would be hugely outweighed by the reduction in demand growth at the top end of the market.

+ Why focus on excessive flyers? We don't have a frequent driving levy or frequent meat eating levy, do we? Shouldn't we just have an overall carbon budget instead?

70% of all flights in Great Britain were taken by 15% of adults according to analysis of a 2014 government survey. This is why we focus on excessive flyers.

Air travel has a different economic place than the other examples. Meat is widely eaten, whereas air travel is undertaken by a small share of the population. It's important to maintain access to some air travel for quality of life and basic needs, because some people have close family overseas who cannot be reached by other means.

While carbon rationing or budgeting is perhaps a valid approach to decarbonisation in general, taxing excess emissions is a different approach which recognises the wider societal problem of incentivising high-carbon behaviours. The frequent flyer levy would in any case have similar outcomes to carbon rationing in that it would incentivise lower personal carbon budgets for those we most need to have their personal carbon output cut.

+ Won’t this penalise migrant communities visiting their families back home?

We’d like access to better data on this but from what we can see, although low-income migrant communities are more likely than others in their income bracket to fly, they are still unlikely to fall into the frequent flyer category that this tax reform will target. Most should be beneficiaries of the reform as flying once or twice a year will be cheaper under the proposal. Higher income migrants who choose to visit their families more often can reasonably be expected to pay more tax to do so.

+ How does this actually work in practice then? it sounds tricky to implement.

In a nutshell, we’d need two significant changes to the way things work at the moment, both of which are definitely feasible. First, HMRC would need access to data that is already captured by the Home Office, on passenger movements in and out of the country. This would have to be stored in an automated database that airlines could access in real time when selling tickets to customers. Second, airlines would need to start recording customers’ passport numbers at the point of ticket sale - instead of before boarding as is currently the case.

+ I’m not sure I want a government database tracking my movements. Isn’t this a privacy issue?

That’s why we are proposing the database only records flight frequency - how many times an individual flies each year - and not destinations. Airlines already capture far more data on their passengers than this, which they use to inform their marketing and business strategies.

+ Why penalise the public rather than the airlines themselves?

It’s crucial to combine the frequent flyer levy with an effective kerosene tax, a measure which does directly target airlines’ heavy use of climate-damaging fuels. Currently, the true cost of flying - in terms of its environmental impact and resource use - is not reflected in ticket prices. If we accept the fact that some flights are still needed, then the airlines are offering a societally important function in a market economy and have thousands of workers who deserve a just transition to other work as the demand for flights decreases.

+ How is this going to stop airport expansion?

The Department for Transport (DfT) predicts a more than doubling of demand for air travel by 2050 on present trends and the Government’s Jet Zero Strategy cements this excessive and unsustainable growth trajectory. The aviation industry wishes to support this rising demand by increasing the size of airports and the number of planes. Yet the Committee on Climate Change (the Government's expert advisors) say that in order to meet our climate targets, we can only have about half as much growth in passenger demand as the DfT predicts, and they explicitly recommend putting a temporary suspension on all proposed airport expansions. By setting the frequent flyer levy at rates that would keep demand growth within safe limits, we can remove the need to build new airport capacity.

+ Isn’t this going to disadvantage British businesses?

Business flights by UK residents are in long term general decline, and are such a small proportion of the total that we could in theory exempt them from the Levy altogether and still get the environmental and social benefits we are aiming for. We don’t think this is the right way to go however since businesses should also be incentivised to reduce their flying, and exempting them from tax altogether would be very open to abuse as wealthy individuals start companies solely to take advantage of the tax loophole for business travel. The best option is probably to charge the levy to companies for their employees’ business flights rather than the individuals flying, with each company having a tax-free flight allowance based on company size. We would like to commission further work to look at the market impacts of this proposal in more detail, both for the aviation sector itself and for other sectors that are currently heavily reliant on air travel.

+ Isn't this going to damage economic growth more widely? What about tourism?

British people travelling abroad spent a lot more money overseas than foreign visitors to the UK spent here. A New Economics Foundation report, ‘Losing Altitude’, found that “two decades of evidence now confirms that air transport growth runs counter to the interests of the UK’s domestic tourism industry”. Statistically, frequent flyers tend to be much wealthier than the average Brit, so they are very likely to be taking more money out of the country with them when they leave too. Meanwhile, most foreign tourists don't visit the UK more than once each year, so they would be beneficiaries of the reform. The economic benefits of air travel all arise from in-bound tourism and international trade. Most air travel, whilst we might enjoy it, takes money out of the British economy.

+ You say this would bring in more money in taxes than air passenger duty. How much more?

Because of the high number of unknown factors in how different passengers' flying behaviours might respond to this reform, and the range of choices that could be made about how to calibrate the actual tax schedule applied to ticket prices, this is very difficult to estimate with confidence. But if we set the levy at a rate that meets climate targets, our model suggest that it could bring in about twice as much tax revenue as APD does over the period to 2050.