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Going Green Means Seeing Red: Carbon Taxes Will Cost Australian Airline $118-$123 Million

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In a bid to offset the financial burden of new carbon tax regulations, Australian airline Qantas announced that it is going to raise the average price of its tickets. The new taxes are a result of Australian prime minister Julia Gillard’s introduction of economic policies that address climate reforms.

According to The Economist, “From next July, 500 of Australia’s biggest polluters will have to start paying a tax of A$23 ($24) a tonne on their own carbon emissions.”

As a result, Qantas believes that the full impact of new taxes will cost them between $118 million and $123 million (110-115 million in Australian dollars) in fiscal 2013.

Despite some revived hopes of Australia becoming a strong player in the efforts against “Global Climate Change” (formerly known as "Global Warming," formerly known as “Global Cooling”), several business owners are unhappy with the proposed plans.

Regional Express, Australia’s largest independent regional airline, says the proposed price of carbon, on top of an imposing number of government regulations, will "decimate" air services.

Regional Express chief operating officer Chris Hine said pricing carbon, removing some rebates for regional airlines, an increased fuel excise and additional security measures would cost the airline about $6 million per year.

"I foresee many regional operators without the financial strength and diversification of the Rex Group being forced out of business once these take effect after 1 July 2012," said Hine.

Additionally, Hine said some regional centers would lose essential flights and called on the federal government to reconsider its treatment of regional air services.

"Given the extremely fragile state of regional aviation in Australia today, once an operator goes out of business it could become irreversible as the returns are too slim and uncertain to attract new entrants," Said Hine.

Along with being forced to pay millions in new taxes, Qantas is also suffering from falling stocks. Shares fell 3.25 per cent to $1.94 (a 1.54 per cent decline in the benchmark index).

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