The International Air Transport Association (IATA) has expressed severe criticism of the recent rise in aviation taxes in Germany.
The organization argues that this move will not only hurt the German economy but also hinder the aviation industry’s efforts to become more environmentally friendly.
Effective from May 1, aviation taxes in Germany have surged by 19%, with fees ranging from EUR 15.53 to EUR 70.83 per passenger depending on the flight route. This tax hike is anticipated to adversely impact Germany’s competitiveness in crucial sectors such as exports, tourism, and employment, while also slowing down the recovery of air transport post-pandemic, which remains sluggish compared to other EU countries.
“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.
