IATA has blasted the German government for a rise in aviation taxes that went into effect on 1 May.
The tax increase of about 19% is being levied on passengers departing German airports. Depending on the route, that will raise the tax to between €15.53 and €70.83 ($16.63 and $75.85) per passenger per flight, IATA said on 2 May. Previously, the passenger tax had been between €12.73 and €58.06 per person per flight.
That added surcharge will “weaken the German economy and damage aviation’s ability to decarbonise”, the international airline association says.
“When Germany’s economic performance is anaemic at best, denting its competitiveness with more taxes on aviation is policy madness,” IATA director general Willie Walsh states. “The German government appears to have an unhealthy obsession with aviation taxes.”
The surcharge will not only hinder the country’s post-Covid-19 recovery, which, IATA says, is already one of the slowest in the European Union, but also slow the industry’s move to decarbonisation.
The government announced the increase in January, and is counting on an additional €400 million this year in order to plug a hole in its budget. In future years, it hopes for annual proceeds as high as €580 million.
In addition to this passenger tax, the German government appears to be in favour of a European jet fuel tax which will make it even more expensive to do business in Germany or for families to travel, IATA adds.
Lufthansa Group chief executive Carsten Spohr said earlier this week that the additional surcharge will cost the company €20 million for the tickets that the airline has already sold, as it will not retroactively charge consumers. However, the impact for aviation in the country is “much bigger”, and will have knock-on effects for non-hubs and secondary cities like Friedrichshafen, which are at risk of losing air service.
“I think German aviation is lagging behind in growth, as you well know, we are below 90% versus 2019,” he said on the company’s first-quarter earnings call on 30 April. “A company like Lufthansa can compensate by flying more internationally, but for some parts of Germany, this means decreased connectivity.”
Additional charges will come next year, he adds.
”I would hope that we also see a turning point of putting additional burdens on German aviation,” Spohr added
IATA says the German government should be prioritising the country’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,” Walsh says.
