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Opinion prof. H.C. Moll: 'Growth in the airline industry will stagnate – now due to the economic crisis, later due to climate policy'

23 June 2009

The holiday period is approaching. That means that once again packed aeroplanes will be flying off to all kinds of distant destinations. The question is, how long can we keep flying on this scale. Henk Moll, Associate Professor of Natural Resources at the University of Groningen, thinks that flying is going to get a lot more expensive. The airlines are going to have to get used to the fact that all good things must come to an end.


Things are not going well for the airline industry and many airlines are struggling to keep their heads above water. Moll explains that there are two reasons for this. ‘Due to the economic crisis, the high end of the market is simply flying less. Business class is barely being filled any more and that’s where the airlines earn their money – it’s the financial mainstay of their business. Passengers in tourist class barely cover their costs.’ And then there’s the fuel crisis, caused by the high price of oil. ‘The economic crisis has caused the oil price to drop slightly, but you can see it gradually creeping up again.’

Crucial fuel

In the long term, too, the prospects for the airlines are not very rosy, Moll feels. ‘The economic crisis will eventually pass, but the price of oil will remain high.’ That’s a problem because kerosene is crucial for the airline industry. ‘Flying on electricity is impossible. Biofuels are not an option either because the amounts you’d need to fly are far too great.’

Surcharges

High fuel costs are not the only thing the airline industry should be worried about. The climate top in Copenhagen, to be held at the end of this year, may well draw up agreements to introduce CO2 surcharges on the airlines. Moll: ‘There’s a big chance that CO2 surcharges will be introduced on flights within Europe in the next decade. It won’t be long after that before global flights are also affected.’

Expanding effect

Moll thinks that the surcharges are essential. ‘They are an unavoidable measure if we want to fight CO2 emissions. After all, flying is not a very clean way to travel and also has the tendency to expand quickly.’ People tend to choose a plane trip over a cleaner alternative like the train. ‘Flying is quick and easy. That has an expanding effect. The airline sector is designed for growth and huge investments are made in new material as a result. That makes flying more efficient and the costs go down. That in turn leads to economies of scale and cheaper tickets.’ On the other hand, for years far too little has been invested in the train sector. ‘The result is that they are less efficient. And that has resulted in flying becoming much more popular than the train.’

Ticket tax

The ticket tax was another measure designed to counteract the damaging environmental effects of flying. Moll thinks it is a shame that it turned into a fiasco. ‘People went to airports in Germany and Belgium to avoid the ticket tax, encouraged by their tour operators.’ This means that the ticket tax has even had a negative effect on the environment. ‘It’s perfectly possible that people travelled further by car to get to the cheaper airports.’ In principle it was a good idea, Moll feels. ‘The idea was that the ticket tax would be a forerunner of European legislation. Sadly, the rest of Europe did not follow our lead. Minister Eurlings then quickly decided to terminate it. There was also a lot of resistance to the ticket tax – it was presented as if it was a disaster for the Netherlands.’

Reduced growth

Moll explains his view of the future of the airline sector. ‘The sector must be prepared for reduced growth. They have to be ready for that – growth is not something that goes on forever. In addition, the airline sector must start to make itself sustainable.’ Moll expects that flying will become more expensive for consumers. ‘That will encourage people to take a high-speed train more often for trips within Europe. There isn’t really a good alternative for intercontinental flights, however. A boat journey is just as polluting as a flight.’

Curriculum vitae

Henk Moll (1952) studied physics in Groningen. From 1981-1984 and 1987-1991 he was a researcher associated with the Centre for Energy and Environmental Studies (IVEM) of the University of Groningen. In 1992 he became a university lecturer and gained his PhD a year later. In 2004 he was appointed associate professor of Natural Resources in relation to sustainable production at the IVEM. Moll conducts a great deal of practical environmental research, nationally as well as internationally, and in cooperation with other disciplines such as psychology and public administration.

Contact details

Prof. H.C. Moll. Tel.: 050 - 363 4607/4609

Last modified:15 September 2017 3.10 p.m.
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