IATA rebukes Germany’s new aviation tax hike as economically detrimental and counterproductive to the industry’s decarbonization goals, amidst slow post-pandemic recovery and rising industry costs.
GENEVA – The International Air Transport Association (IATA) sharply criticized the increase in German aviation taxes, which will weaken the German economy and damage aviation’s ability to decarbonize.
On 1 May, German taxes on flying increased by 19% to between 15.53 euros and 70.83 euros per passenger, depending on the route. The tax will make Germany less competitive in key economic areas such as exports, tourism, and jobs. It will further affect Germany’s air transport recovery from the pandemic, which is one of the slowest in the EU. Germany’s international passenger numbers, for example, are still 20% below pre-pandemic levels.
“When Germany’s economic performance is anemic at best, denting its competitiveness with more taxes on aviation is policy madness. The government should be prioritizing measures to improve Germany’s competitive position and encouraging trade and travel. Instead, they have gone for a short-term cash-grab which can only damage the economy’s long-term growth,” said Willie Walsh, IATA’s Director General.
IATA also warned that the tax increase will hamper the industry’s efforts to decarbonize. Aviation has a goal of reaching net-zero CO2 emissions by 2050 and sustainable aviation fuels (SAF) are vital to this effort. The German government coalition agreement originally stated that revenues from aviation taxes would directly fund production of SAF, but this commitment has been broken. In addition, weakening the German air transport industry with this tax makes it harder for airlines to invest in SAF, in a more fuel-efficient fleet and other decarbonization efforts. Furthermore, the German government appears sympathetic to the European Taxation Directive which would add a tax on jet fuel.
“The German government appears to have an unhealthy obsession with aviation taxes. On top of increasing the passenger tax, it is also in favor of a European jet fuel tax which will make it even more expensive to do business in Germany or for families to go on holiday. Our survey of air travelers in Germany shows deep skepticism about government claims for ‘green taxes’. 75% agreed with the statement “Taxation is not the way to make aviation sustainable” and 72% agreed that “Green taxes are just government greenwashing”. Time and again, we see taxation that was supposed to help the industry decarbonize be stolen and then lost in the general budget. And money taken out of the industry means that it has less money to invest in other decarbonization measures,” said Walsh.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
