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Comment by dewey | Hacker News Reader

Finally. It's really frustrating to see how heavily subsidized airlines, plane fuel and airports are and how big of a tax breaks they get when they come to a city.

At the same time people are shamed for buying salad in a plastic bag when the big lever is somewhere completely different. Had the same thought yesterday when I saw:

https://twitter.com/paulg/status/1148317244893597696

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International Air Travel is one of the most heavily taxed, if not the most heavily taxed, activity. It's not unusual for the taxes to exceed the ticket price. Here I just looked on kayak for a flight from SFO to Berlin. Here is the price breakdown:

   Ticket price USD 465.00
   Taxes, Fees and charges USD 540.52
   ---------
   International/Domestic Surcharge USD 350.00

   APHIS User Fee USD 3.96

   Immigration User Fee USD 7.00

   Customs User Fee USD 5.77

   United States International Departure Tax USD 18.60

   United States International Arrival Tax USD 18.60

   Passenger Civil Aviation Security Service Fee USD 5.60

   Air Transport Tax USD 46.58

   German Aviation Security Charge  19.15

   Passenger Service Charge - Intl USD 23.95

   Passenger Service Charge - Dom. USD 36.81

   Passenger Facility Charge USD 4.50

   Total price USD 1,005.52

Take-off and landing account for a lot more pollution than a flight in cruising altitude on long trips. That's why we usually talk about the problematic domestic flights where trains are an alternative. There's not really a good alternative for long haul flights.

Flights within Europe are not that heavily taxed, otherwise I wouldn't be able to fly Berlin - Brussels for 9 Euros.

Yes, the huge taxes are generally for international flights, and I think part of the reason is that, as you say, there aren't a lot of options for those flights so they have a captive market and are thus better able to bear those taxes. If you start with punitive taxes on domestic flights in the EU, it will disproportionately hit the airline industry there.

As with many things, the game with taxes is how to make the incidence of the tax fall more on the consumer and less on the producer. If you can accomplish that, then the tax is more likely to get through because unfortunately we don't have consumer lobbyists anywhere as strong as the business lobbyists.

Taxes always fall on the consumer. Businesses don’t pay tax.

https://miltonfriedman.hoover.org/friedman_images/Collection...

That depends on the product being taxed. I learned this in econ101 that the price elasticity of demand determines who bears the bulk of a tax. I don’t have references in my old textbooks handy, but here is exactly the same concept as I learned it[1]

Basically, if demand for a product is inelastic (eg. cigarettes, insulin) that will pretty much be 100% passed on to customers by the business. You can see the supplied link for examples where the seller has no choice but to eat the tax (or most of it) or people will just stop purchasing.

[1] https://www.khanacademy.org/economics-finance-domain/microec...

This doesn't explain why Norwegian are above to fly transatlantic for as low as $104 one-way (PVD-DUB on Feb 5th). I know that Providence airport likely charges lower fees, but it demonstrates how little "tax" is being paid on international flights.

Norwegian has been hemorrhaging money recently, because they can't compete with traditional airlines.

I used to be a great proponent of Norwegian... but now... They cost as much, with less flexibility.

My example literally demonstrates just how cheap they can be???

Wait, Berlin to Brussels for €9? Good lord, that is far too cheap. For example, the distance is roughly equivalent to Denver-Albuquerque. Kayak's cheapest quote is $119 one way, scheduled 1 month in advance. I knew flights in Europe were cheaper, but how is it possible to operate profitably at that price? Kayak shows $23 for Ryanair Berlin-Brussels.

For comparison, I had a vehicle breakdown and needed to take an (awful) bus that distance in the US, and it cost far more than $23 (IIRC, it was ~$75 and took 18 hours).

"How is it possible to operate profitably at that price?"

It isn't: Air Berlin, Monarch, Primera, Small Planet, Azur, Cobalt, VLM, PrivatAir, Icelandic carrier WOW.

They were run like traditional airlines, but traditional airlines can offset short haul losses with long haul profitability.

Primera and WOW were in trouble because they couldn't offset losses on their long-haul with anything.

I mean... I will not consider lower confort on transatlantic route, while sub 3 hour flights Ryanair is actually great.

Ryanair,which is pretty successful business, is essentially a flying kiosk. The tickets are cheap but you pay for everything else.We had a company trip from London to Ibiza. Throughout the entire flight stewardess hasn't managed to wheel out the trolley with drinks,because there was a constant queue of 10-15 people buying alcohol. An average pub on Friday night doesn't sell as many drinks as they did on that flight. They also make tons of money from car rental,hotel, insurance referrals and many other upsells. No one in his own mind would otherwise think that running a plane that costs tens of millions of dollars with tickets worth €9 can be profitable.

I pay more than 9€ to go from NJ to NY in a greyhound bus!!!

How is it so low? Even with all subsidies, kinda hard to believe

That's not exactly correct. Ryanair expect to make about $50 per passenger one way.

Though even at profitability, the flights in EU are typically cheaper.

Flights in Russia, Ukraine, Belarus are very expensive... They are in Europe as well.

9 euros isn’t the actual cost: it’s a loss leader for selling you other stuff for the flight. Also, that 9 euros doesn’t include taxes. Conversely, why are train tickets so expensive? Perhaps trains are overtaxed, or maybe less efficient?

Because these are extremely subsidised. Besides that, those airlines use every dark pattern in the book, so most people end up paying significantly more.

> if not the most heavily taxed, activity

In Germany consumer electricity prices have a comparable fraction of taxes and fees. So do salaries for high-paying jobs. If these levels are tolerable we can certainly go higher.

Gas prices in most countries in Europe have a higher fraction than this, same for cigarettes.

Most of these “taxes” aren’t really taxes in the sense of the tax on petrol or alcohol. They’re charges to cover the direct cost of flying, a bit like a toll road

Taxes pay for roads and socialized medicine, in the case of petrol/alcohol/cigarette taxes. Just because they're not direct or itemized, doesn't mean they don't apply in a similar way.

You are mixing in airline surcharges with taxes.

The taxes here amount to 8,33% of the total ticket price.

The rest are actual charges that airports/government services levy for work done, as well as the famed fuel surcharge (usually recently noted as international/domestic surcharge) that airlines use as an wildcard addendum to the base fare of the ticket.

If you exclude the airport fees and whatnot, you can’t claim that flights are heavily subsidized. The airport fees pay for all the capital infrastructure airlines use. (Trains also use capital infrastructure paid for by governments.)

That international/domestic surcharge looks like an airline imposed charge. Not sure why they do it that way instead of having it in the ticket price. But the actual taxes paid on this ticket are a lot less when that surcharge isn’t included.

It appears that it's sometimes because it's easier in terms of internal accounting for airlines to adjust pricing that way. In other cases, some taxes may be a percentage of the fare, not the surcharge, allowing a lower all-inclusive price with the same amount of profit for the airline.

$7 / passenger for Immigration, $5 for customs!

Thats insane revenue, you would expect at least a good service from it.

Do you think that US government is efficient?

How come one pays arrival tax in the US even though the plane is heading to Germany?

Likely because the connection is within the US. There are no direct flights SFO to Berlin - only from New York, Philly and (surprisingly) Wilmington.

Actually. Taxes aren't even close to being the highest bit. The parts that are taxes are:

  APHIS User Fee USD 3.96
  Immigration User Fee USD 7.00
  Customs User Fee USD 5.77
  United States International Departure Tax USD 18.60
  United States International Arrival Tax USD 18.60
  Passenger Civil Aviation Security Service Fee USD 5.60
  Air Transport Tax USD 46.58
  German Aviation Security Charge  19.15

The majority of the charges are airport services. But they typically just put everything with Taxes, so you think it's taxes.

The whole passenger air travel industry (airlines, aircraft manufacturers, airports, etc) is subsidized because they’re not profitable on their own. But a robust and affordable air travel network is a capability the business world needs to operate our economy.

Boeing and Airbus are two of the most heavily subsidized companies in the world, and the airlines themselves aren’t far behind. They’re both high-risk, low-margin businesses.

I don't have a source for that but I'd say if the airlines etc wouldn't be so subsidized there would be higher focus on developing better engines, electric planes or other technologies than in the current state where losses will just be covered by the tax payer. They wouldn't just stop operating and the "business world" would most likely not collapse.

I've talked to a bunch of people that get flown around by their company for 2h meetings at airports within Germany every day. If these wouldn't happen and would be done via video conferencing or other means that would be an improvement. Business will find a way to make it work.

This is exactly what has happened — the 787 is the result, and is hugely popular with airlines. But the operational life of a big jet is measured in decades, and there are plenty of 50-year-old airframes in regular operation today.

For some context in case anyone is curious: putting together information from various websites suggests that the following is the oldest plane in commercial service today. https://m.planespotters.net/airframe/Boeing/737/5Y-CGV-Zone-...

It is a Boeing 737-200 and it has been in service for 43.7 years.

Hardly.

There are still DC-3's in commercial operation, and production of those ended in 1942.

http://www.buffaloairways.com/ is one operator.

They have two Curtiss C-46 from 1945. Its interesting that its cheaper to continue to pay for the maintenance and fuel than lease something more modern.

Replacements don’t exist. Those old prop liners can operate off unimproved dirt strips, grass, even snow and ice - and off short runways too.

Jets don’t like that.

For back country missions the only thing maybe better than a DC-3 is a Basler... and that is a modernized DC-3 with reinforcements and turboprops for more power. They suck a lot more fuel than a plain DC3 though, which can be problematic as some of these fields they have to fly fuel in.

A C130 should be a viable modern alternative for those use cases, if economic

A fully loaded DC-3 can takeoff in just over 2000ft. A C-130 needs almost 4000ft.

There are no small planes that can replace DC-3. C-130 is massive!

It appears you are correct in this regard and the websites I used are not.

Are there any such planes used for regular scheduled (passenger) airline services? It appears to me that Buffalo Airways is charter and cargo only.

They don't seem to be a scheduled service operator. They look like a charter airline.

Common definition of a "commercial operation" for airlines is scheduled operation, not charters.

So... That boeing just may be the oldest flying airliner on scheduled routes.

As the 737 Max has shown, this isn’t exactly the industry you want to “move fast and break things” by attempting to try out every late and great technology. Then there is just an issue with the business model in general. Customers typically make their purchasing decision on the lowest cost option, things like the weather are out of your control, there’s huge capital investments needed, and there’s a high risk if anything goes wrong.

do you have any idea how many carbon emissions are created with a two hour meeting? The network, the video servers, the laptop/desktops - the monitors, the A/C to cool each of those people at the distributed locations?

While it is valid to bring this up, I'm pretty sure the emissions and energy usage of a videoconference are minuscule in comparison to the flights that are replaced. Laptops will be needed in both cases, as well as A/C (if that is necessary at all).

I'm pretty sure the parent comment was in jest.

This is funny, because the reason they are not profitable on their own is because they don't need to, since they are subsidized.

Competition makes those companies use any cost-saving they can. If the government takes an option away, they'll just all not use it anymore and settle down on a higher price.

And, ironically, the same people that want these subsidies argue for less government oversight because the "market will sort itself out."

Sorry but i have never heard a small government person think there should be airplane subsidies in my life.

Who paid the F35s 1.5 trillion?

No one because it's not a lump sum. It's a projected cost over 50 years.

That's the military, not the airplane industry.

The people of the countries the US is strong arming into buying this failure

Many Republicans are in favor of subsidies of industries like Boeing when they are in their district. I expect they would describe themselves as believers in small government.

And let's not resort to the No True Scotsman fallacy ...

Probably because it means they get federal money, not because they want to cut out the subsidies out of their own budget.

There’s an element of realpolitik here too: a predictable side effect of ending subsidies for the aerospace industry is that the business would shift to a country that does subsidize. Those companies build a lot of operational knowledge that is super useful — to the point of being a major strategic advantage — in wartime. It also makes you beholden to that country (and subsequent economic sphere of influence) strategically. Governments are responsible for more than just the economy.

Competition between governments is also a thing, and I think we’re already seeing it matter as part of a pullback on globalization with respect to China.

affordable air travel network is a capability the business world needs to operate our economy

Is it? Why? Frequent air travel is super recent.

Internet is even more recent, does it make even less necessary to operate out economy?

Not sure it's what you meant, but the internet does make air travel less necessary to operate the economy.

I was making the point that just because something is 'recent' doesn't mean it isn't necessary and we can go without because 20-50-100 years ago it wasn't needed.

The world changes. I travel all over the world for business. Contracts that I couldn't do without that travel. Just because 50 years ago I wouldn't be able to do it, doesn't mean it isn't necessary now. (Same as internet, just because 50 years ago you didn't need, or have, the internet, doesn't mean nowadays is an integral part of business)

well they need it to operate the economy in the way that it has been operated as of late. which is to say: maybe if we take that away from them, we could solve two problems at once? Pollution from air travel, and all the societal problems that a globalized economy without meaningfully global regulation brings?

If it’s the case that international air travel makes companies more competitive, all you’ll really be able to do is to further stratify the winners from the rest of the pack by sharply increasing the cost of air travel.

The modern economy is "super recent". So are computers and solar cells. Just because something is new doesn't make it easily dispensable.

Perhaps if air travel became cost-prohibitive more corporations would invest in remote workflows and cultures?

This argument contradicts itself.

If air travel is essential to operate the economy itself, people will pay for it without subsidies, and cut down on non essentials, if need be.

I don't know about businesses but I also think that international passengers travel is an important part of world peace. Being able to visit other countries and learn about different cultures really brings intolerance and nationalism down.

I wish it was mandatory for every student to visit two or three very different countries during their studies.

I understand the emissions are problematic and we need to cut them down. I like the idea of forbidding or de-incentivizing air travel on short trips when a rail alternative exists. I just wish we put that at the bottom of the priority list. Remove coal plants and fuel cars first.

> I wish it was mandatory for every student to visit two or three very different countries during their studies.

That was common in the 80s & 90s but we did it wearing a backpack and hopping on buses and coaches and sleeper trains; air travel was much too expensive back then.

That's in contrast to modern Ryanair-style stag-party 'tourism' where students descend on a city for a few days and then zip back home.

Buses and backpack won't expose you to different culture. Esp, in a country as big as the US. Unless you live close to the southern border, you won't even be exposed to people speaking a different language, which is an important thing to experience.

We travel to get away from the hell holes we created locally, just to then turn those destinations into carbon copies of the places we were trying to escape from.

> But a robust and affordable air travel network is a capability the business world needs to operate our economy.

Then the business world can pay for it through ticket prices.

Airliner manufacturing isn't low margin, by far. Airbus reported EBIT €5.8bn on €64bn revenues for 2018. 9% profitability is pretty good for durable goods company. Airlines aren't all exactly on paper thin margins. Southwest operates at about 15% margin

Apple, the posterchild of high margins, reported profits of $14bn on $62bn revenues for Q4 2018... that's 22%. If you want low margins, look at retailers.

Aviation accounts for just 2% of global carbon emissions: https://www.vox.com/energy-and-environment/2019/1/11/1817711.... The plastics industry will burn through 14% of remaining carbon budget: https://www.desmogblog.com/2019/05/15/plastics-industry-clim...

Aviation hurts the climate in multiple ways of which CO2 emissions are just one. Vapor trails apparently contribute even more to anthropogenic climate change. Overall the contribution of aviation is estimated to be 5%.

Those are 2 very different measures. You can't compare them.

Aviation is a small factor globally because almost nobody can afford to fly. For a typical westerner like me, a transatlantic flight per year roughly doubles my carbon footprint. Similarly, meat is a really big factor globally, because most people can afford to eat some meat, but for a westerner it makes up a much smaller (but still signifacent...) fraction of the pie because I use so much energy compared to a villager in India.

I don’t pay expensive excise taxes, passenger service fees or “security” fees when I’ve taken a train. Yet air travel is taxed to hell and back. I get it, anti-air is the cause du jour, but until there is a train from SFO to Paris that wouldn’t take 20 days, it makes no sense to tax air travel so heavily. Air travel has had the biggest impact on connecting the world than almost any other tech aside from the internet. I would be tar and feathered among a certain crowd for saying this, but I love air travel and if it causes the temperature to rise .25 degrees over the next 50 years, so be it. Airplanes represent freedom. Taxing mobility is taxing freedom itself. Take a train from Marseille to Berlin and then one might appreciate how important air travel is. It’s trendy to oppose air travel but it’s like being opposed to ocean pollution and subsequently banning toddlers from peeing in the water at the beach.

If the entire world went to nuclear power tomorrow, the climate impact of air travel wouldn’t even be a rounding error. Power generation is the biggest contributor to pollution. Airplanes are barely a few percentage points and airplanes in France have such an infinitesimal influence on world climate that the whole exercise is a joke and smacks of self-congratulatory virtue signaling more than any actual solution. Remember the politics here: the cheminots in France have extraordinary power: they can shut down the country on a whim — anything that harms air travel directly benefits one of the most powerful unions in France.

You get less of what you tax, and more of what you subsidize.

I guess the French want fewer people visiting their country?

If the fee is paid on flights leaving French airports, then it follows that France wants people to go to France but not leave.

I don't think the policy has anything to do with tourism.

> I guess the French want fewer people visiting their country?

I do not see any evidence that this is their goal. They would consider it an unfortunate side effect of a necessary environmental policy.

>Finally. It's really frustrating to see how heavily subsidized airlines, plane fuel and airports are and how big of a tax breaks they get when they come to a city.

I suppose the Airlines will just pass along any new taxes to the traveling consumer. I was always under the impression that airports in France were economic drivers of prosperity considering tourism makes up about 77 billion euro of economic impact to the GDP France.

Hope it works out for them...

> I suppose the Airlines will just pass along any new taxes to the traveling consumer.

Well, yeah, but what is the problem with that? The price increase thus decreasing the demand of flights, achieving the goal.

> Well, yeah, but what is the problem with that?

Because Airlines seem to be the intended target and not the tourist. I would imagine they would have instituted an airport fee if the tourist was the target.

>The price increase thus decreasing the demand of flights, achieving the goal.

This could cause a drop in tourist dollars but maybe that's the goal. It seems Europe in general is wary of tourists. Spain has gone so far as to discourage tourism to Barcelona by restricting any new hotels or tourist accommodations. France may be following their lead and taxing Airlines instead, creating less across the whole country instead of a particular city.

That’s silly, bordering on ridiculous. The goal is to reduce emissions. That will obviously have economical consequences. Hell, that’s the whole reason we are in this mess, because doing the right thing costs more than the alternative!

Look at your last ticket. The fees being assessed are already being passed through to the end consumer. (Since they’re the one who is bringing the money into the system, they’re obviously the one who is paying it, but in this case it’s pretty transparent already.)

They could turn around and spend the revenue to make CDG not suck.

The economic drivers of prosperity, unfortunately, are what got us in this predicament in the first place. In the world we now live there’s no way flights should be cheaper than train tickets, should never have been.

> I suppose the Airlines will just pass along any new taxes to the traveling consumer.

That's not an unfortunate consequence, that's the idea.

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