“We can’t succeed if we’re taxed to the rafters”
Icelandic airlines bear proportionally higher costs than other European carriers, says Bogi Nils Bogason, the CEO of Icelandair. mbl.is/Eyþór
Bogi Nils Bogason, CEO of Icelandair, says that the carbon tax the airline must pay puts the company at a disadvantage compared to competitors outside Europe — and stresses that the Icelandic government must respond.
Bogason discussed the matter in the latest episode of the Þjóðmál podcast, hosted by Gísli Freyr Valdórsson.
The two talked about Icelandair’s position in the international aviation market and how global systems and tax policies affect the company’s operations. Bogason said airlines cannot make meaningful progress on climate goals if they are “taxed to the rafters.”
Calls for action from the government
Speaking about the EU’s Emissions Trading System (ETS), Bogason said it is “absolutely vital that the government acts now,” as the current situation poses a serious threat.
“It’s not only that Icelandic airlines are bearing proportionally higher costs than other European airlines — even those European carriers are facing higher costs than all the non-European airlines we compete with, since those companies aren’t part of the ETS system. Air traffic is simply shifting elsewhere,” Bogason said in the interview.
He offered a concrete example:
“When an American airline flies from New York to Paris, it doesn’t pay a carbon tax. But when Icelandair flies a passenger from Paris to New York via Iceland, we have to pay a carbon tax on the leg between Iceland and Paris.”
