Norwegian Air / Press

Last year, an aviation tax was proposed by the Swedish Green Party, with the intent to make airlines operating in Sweden accountable for their emissions.

More specifically, every flight to a European destination would be taxed 80 Swedish krona ($9), while flights outside Europe would be taxed 280 SEK ($30). Longer intercontinental flights would be taxed a full 430 SEK(~$50)


The Swedish government has supported the measure, which could come into effect in January 2018, if approved by parliament. 

”The purpose of the tax is to reduce the climate impact of flights, and make them achieve the environmental quality goal of 'Limited Climate Impact'", said a press release by proponents of the aviation tax.

Though the airport tax is an active measure intended to help hit national and global climate goals, it is getting serious counterpush from the private sector; the aviation industry in particular, which produces some 2% of the the world’s CO2 emissions.

The industry's main counterarguments are that jobs and economic growth will be lost, and airlines will have to close down some of their flight routes in Sweden and take them to countries without a tax. 

Also Read: SAS could move all intercontinental flights from Stockholm to Copenhagen

Norwegian Air's CEO and founder Bjorn Kjos recently gave his take on the matter in an op-ed in Dagens Industri, outlining his stance on why the aviation tax is misdirected and would hurt the Swedish economy and its consumers.

Here are his main arguments.

1. The government’s growth-oriented policies conflict directly with its backing of the airport tax.

The tax would adversely affect the government's explicit goals of growing the country's tourism, exports and direct flight connections to growing economies, says Kjos.

The Swedish Air Transport Society has calculated that around a million passengers will be lost each year, while ticket prices will have to go up to cover the tax. 

"The nearly 2 billion krona per year that the tax is expected to bring in have to be put in relation to the revenues Sweden will lose out on, and the accesibility to- and from Sweden gets worse," he wrote in Di.

As the Norwegian airline expands globally, Kjos says Norwegian wants to make Sweden one of its key hubs:

"Does Sweden really want to miss out on the opportunity to make Arlanda Northern Euorope's main hub for long haul flights between Asia and the US?"

2. An aviation tax is the wrong way to reduce emissions

Kjos acknowledges the need to reduce CO2 in the industry, but argues that a national tax is piecemeal solution and won't bring its intended benefits, just as it didn't in Denmark, or the Netherlands "where the tax was abolished already after one year as GDP had shrunk with 11 billion SEK."

“We need to reduce airline industry’s climate effects [..] but global problems need global solutions,” says the 70-year old founder of Norwegian Air, and proposes technological measures as the way to reduce emissions.

Kjos believes biofuels will ultimately do their magic across the industry, but until widespread adoption happens, efficient airplanes are key. Norwegian's own fleet is made up of new, energy efficient planes that reduce emissions with up to 20 percent, he points out.

"It's much more effective to have incentives for airlines to invest in modern airplanes."

3. Don’t kill our special relationship

Kjos calculates that the tax would cost Norwegian Air some 400 million SEK ($45m) per year, "an unreasonable fee for an industry with already low margins". 

He says new planned routes like Gothenburg - New York could go by the wayside altogether, as a result of the cost increase. 

Kjos says Norwegian flights contribute today 6,5 bn SEK revenue to Sweden, as well as providing 13,000 jobs. His ending plea promises to double down and grow that effect:

“Instead of introducing an aviation tax, let us help in connecting Sweden with the world, with better accessibility, and increased economic growth as a result.”

...So what to make of all this?

In the bigger context, we do know that the Arctic is already melting away at an alarming pace and other climate change-related events are wreaking havoc around the world. In the meantime, the airline industry is projected to keep growing by 50% by 2050, according to IEA.

The Swedish government's tax proposal could be seen as laudable measuble in this context; but no nation wants ill-considered taxes that hurt the economy and gives business to other countries.  

On the other hand, it's fairly simple for international companies to keep referring to a bigger context beyond national regulations, and retain the status quo of ever-increasing traffic and emissions while promoting technological improvements.

Do economics trump emissions reductions?

The jury is still out in Sweden’s case.