German flight taxes surged by 19% on 1 May, ranging from EUR 15.53 to EUR 70.83 per passenger based on the flight route. This increase will undermine Germany’s competitiveness in crucial sectors such as exports, tourism, and employment. Furthermore, it will hinder the recovery of Germany’s aviation industry from the pandemic, which has been one of the slowest in the EU. Notably, international passenger figures in Germany remain 20% lower than 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 encourage 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 decarbonization efforts.
The aviation sector aims to achieve net-zero CO2 emissions by 2050, and sustainable aviation fuels (SAF) are crucial for this objective. However, the German government coalition agreement, which initially pledged to allocate aviation tax revenues for SAF production, has reneged on this commitment. This tax burden on the German air transport industry not only hampers airlines’ ability to invest in SAF and develop more fuel-efficient fleets but also aligns with the European Taxation Directive proposing an additional tax on jet fuel, exacerbating the situation.
“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.
