Delta adds $ 3 surcharge on fares between US and Europe

Thursday, 5 January 2012 00:00 - - {{hitsCtrl.values.hits}}

Reuters : Delta Air Lines said on Tuesday it has added a $3 surcharge each way on fares purchased in the United States for flights between the United States and Europe, a move that would help offset the cost of the EU’s new Emissions Trading Scheme.

Delta is the first major US airline to raise the price of US-to-Europe flights since the European Union’s carbon law kicked in on Sunday. Europe’s highest court last month backed the controversial EU law to charge airlines for carbon emissions on flights to and from Europe.

A spokesman for Delta, the second-largest US carrier, said the surcharge was added on 2 January, but he declined to say whether its purpose was to shift the burden of the EU requirements to its customers.

It remains to be seen whether other carriers will match the Delta surcharge. Unmatched surcharges and fare increases can fail if rivals do not launch similar price increases.

“When airlines raise prices they’re testing two things: the appetite of their competition and the appetite of consumers,” said Rick Seaney, chief executive of Farecompare.com, which tracks air fares. “If either one of these two balk, they typically have to roll back those increases.”

Airline experts have said US carriers must add the cost to ticket prices or risk eroding their margins on trans-Atlantic flights.

Some industry watchers predict airfares between the United States and Europe could rise $50 to $90 as airlines attempt to pass along the expense.

Seaney said he was not aware of other carriers that have matched the Delta surcharge. Antitrust laws prevent US airlines from publicly discussing their future pricing.

Germany’s Lufthansa, however, told passengers on Monday to brace for higher ticket prices because of the EU scheme to tackle climate change.

Under the EU plans, airlines touching down or taking off in the 27-nation European Union and three neighboring nations must account for their CO2 emissions.

The United States, China, India and others have attacked the scheme, saying it infringes their sovereignty. They argue that the EU should not act alone. Some have warned of counter-measures.