German aviation tax comes into force

3rd Sep 2010
German aviation tax comes into force

German passenger carriers have been left reeling, as the national government implemented a new levy on flight tickets.

Initially announced earlier this year, the charge will add €8 to tickets to 52 European destinations, €25 to 50 airports in Asia and Africa, and €45 to all other destinations.

Chancellor Angela Merkel’s government confirmed the tax will be imposed on all flights out of the country from January 1st 2011, including tickets booked from today.

The levy is part of a proposed budget designed to save the German exchequer €80 billion in the period to 2014.

Finance minister Wolfgang Schaeuble said timing was crucial: “We are implementing the measure with immediate effect following today’s Cabinet resolution.

“Otherwise, there will be a rush in ticket-buying aimed at pre-empting the tax,” he added.


Industry Reaction

The tax has been greeted with hostility from Lufthansa and Air Berlin – the two largest carriers in the country.

In a statement Lufthansa said: “Such unilateral action will weaken Germany as a base for the aviation industry, and will massively distort competition.

“The relationship between the level of the tax and the distance flown will put Germany - a leading export nation that relies heavily on global connections - at a special disadvantage.

“The aviation tax will give momentum to foreign airlines and airports, as the experience in the Netherlands has shown.”

Dutch authorities abolished a similar tax in 2008, conceding the revenue raised was far less than the revenue lost due to a decrease in traffic as customers switched to competing airports.

Despite the potential advantage conferred in British carriers, ABTA joined the chorus of criticism.

ABTA head of public affairs, Luke Pollard, said “The introduction of this tax is a seriously regressive step that will impact on UK visitor numbers to Germany and Germans coming to the UK.

“The German government has previously stated that this tax would be a temporary measure and abolished in 2012 when the EU’s Emission Trading Scheme comes into effect and we will be writing to obtain confirmation that this is still their intention.”

Air Passenger Duty

A similar Air Passenger Duty has come in for criticism in the UK.

Following assurances from chancellor George Osborne the tax would be revaluated a delegation from the Caribbean Tourism Organisation (CTO) will next week address the British government in the latest attempt at reform.

The delegation will include John Maginley from Antigua & Barbuda, Edmund Bartlett from Jamaica, Richard Sealy from Barbados, Glynis Roberts from Grenada, Richard Skerritt from St Kitts & Nevis, Allen Chastanet from St Lucia, and Hugh Riley, secretary general of the CTO.


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