9-Mar-2011 9:52 AM

Carbon taxes to hurt Qantas

Australia's Government plans to introduce a domestic carbon pricing regime which will threaten Qantas’ profitability, and complicate its efforts to mitigate the affect of carbon taxes in key aviation markets internationally (The Australian Financial Review, 09-Mar-2011). Analysts expect the hit to Qantas’ annual earnings from a domestic carbon tax of AUD20 (USD20) a tonne could be up to AUD100 million unless passed onto passengers. This figure does not include the CO2-related costs the airline will incur in international markets such as New Zealand and the European Union. The Australian Government plans to introduce the carbon tax on 01-Jul-2011. Qantas rival Virgin Blue does not operate into Europe, nor does it operate domestic services in New Zealand.