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airline profits from carbon tax?
So, airlines can profit from EU carbon tax? I confess to some skepticism about the claim
The rationale is less than convincing, that these profits accrue because the airlines can charge passengers for the cost by way of higher fares. The idea harkens to a cost theory of value that exposes an ignorance of economics that would be plain enough by the authors considering what drives their own choices when purchasing airline tickets.
If they are like almost everyone else who purchases plane tickets, they are doing so on the basis of price; anything that increases that price brings the ticket sale into the hands of your competitor. An additional cost burden will disproportionately harm the less efficient carriers, those less able to tolerate an added charge within their narrow profit margins.Beyond this is recognition that the air traveling public have limited resources. People can't just accept higher prices without also giving up other things they desire. On the margin, higher prices for air travel means that fewer people will travel that way; they will either not travel at all, or will choose other alternatives that would be less desirable if air fares were any cheaper.