Delta, Lufthansa to hike prices to cover emissions

[January 05, 2012]  NEW YORK (AP) -- Within days of new European rules on carbon emissions produced by passenger jets, two major airlines say they will raise fares.

Delta Air Lines Inc. began adding $6 per round trip to the price of tickets sold in the U.S. for travel to Europe. And Deutsche Lufthansa AG said it will raise prices but not right away.

Under European regulations that took effect this week, airlines flying in and out of Europe must get certificates to pay for the carbon dioxide emissions produced by their flights. They will get free credits to cover most flights this year but must buy or trade for credits to cover the rest.

Lufthansa said it would have to buy at least 35 percent of the certificates it needs based on past emissions and recent growth. It put the cost at euro130 million ($168 million) in 2012. The German airline said that it will pass the cost to customers by raising current fuel surcharges, but it didn't estimate the per-passenger increase.

Atlanta-based Delta is the world's second-largest airline in passenger traffic behind United. Lufthansa is the fifth-largest, and the second-largest in Europe after Air France-KLM.

U.S. airlines fought the European Union emissions rules, and were joined by airlines in China, India and other countries outside Europe, but the EU's highest court rejected the challenge.

Environmentalists have praised the EU for extending its pollution policy to airlines. Critics warn that it could lead non-European nations to retaliate by limiting access to their routes and airports.

Lufthansa board member Carsten Spohr said that adding airlines to the EU emissions-trading system would make flying within or through Europe more expensive and that international opposition makes it unclear whether the system will upset competitive balance in the airline industry.

[Associated Press]

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