Friday, July 16, 2010

Germany Proposes Creative Air Tax to Plump Coffers

Posted by Travel Sentry

While researching flights to Germany, I came across this timely story from Associated Press reporting that Germany plans to charge up to euro26 ($33) for flights creating pressure on the environment. Germany, like the airlines, is getting creative to fill their much strained coffers.

In draft form at the moment, the bill has two different metrics for this tariff: a charge of euro13 per passenger on flights of up to 1,553 miles which includes the whole European Union, and euro26 for longer-haul flights taking off in Germany.

Passengers traveling within Germany and children under the age of 2 will not be charged.

According to the Associated Press, the reason, other than additional revenue, is to encourage people to use more environmentally friendly methods of transportation, such as trains.

But back to financing deficits, “the government expects the tax - first announced last month as part of a plan to save euro80 billion through 2014 - to bring in an annual euro1 billion starting next year.”
A spokesman for Deutsche Lufthansa AG, Peter Schneckenleitner, said Germany's biggest airline "is strictly opposed to the tax on air traffic."

The heavy tax burden on long-haul flights particularly disadvantages German airlines as passengers can easily use a hub elsewhere, he added.

… A spokesman for Germany's second biggest airline, Air Berlin PLC, said the new tax distorts competition and the distance rule seems arbitrary.

… When the government first floated the tax early June, the head of the International Air Transport Association, Giovanni Bisignani, called it nothing but a "cash grab."

The measure is "the worst kind of shortsighted policy irresponsibility," a blow to a fragile industry that is key to the economic recovery, he said.

Tackling climate change requires a global solution and "not uncoordinated regional taxes", Bisignani added. AP

No comments: