France unveils plans for new €180m aviation tax

Clay Curtis
July 10, 2019

The move, which will take effect from 2020, will see a tax of €1.5 imposed on economy-class tickets on internal flights and those within Europe, with the highest tariff applied to business-class travellers flying outside the bloc, Transport Minister Elisabeth Borne said.

The amount of tax due will depend on where the plane is heading and the type of ticket bought, costing anywhere from one to 20 USA dollars.

A similar Air Passenger Duty is already in place in the UK.

Bourne said that the additional fee on tickets will be seen as €1.50 on economy tickets, €9 on business class tickets for flights travelling within France and the wider European Union, but prices increase rapidly to €18 on tickets for destinations outside of the EU.

France will introduce a new eco-tax on air travel starting next year, the proceeds of which will be invested in greener transportation alternatives.

Shares of Air France and Lufthansa extended losses and were down 4.5% and 2.5% respectively following the announcement.

Flights to the French Mediterranean island of Corsica and also the French overseas departments - which are hugely dependent on air links for their existence - will be exempt, she said.

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French airports association UAF also criticized the tax, saying it would penalize the French air transport industry and harm the country's air connectivity.

Limousin said tax exemptions for jet plane kerosene fuel cost French taxpayers more than 3.7 billion euros per year.

"This alone won't do much, but it's at least a recognition by the French government that more is required", said Andrew Murphy, an air travel expert at Brussels-based group Transport and Environment.

Germany's Environment Ministry said Tuesday it supports discussions on additional CO2-based pricing systems for air travel to reduce the industry's contribution to man-made greenhouse gas emissions, now estimated at more than 2% but forecast to grow significantly in coming decades.

Industry group IATA, which favours a system that allows airlines to offset their emissions by paying for carbon reduction efforts elsewhere, called the French ticket charge "misguided".

The decision to create the new tax was made by France's new ecological defence council, created by President Emmanuel Macron in the wake of the "yellow vest" revolt and meant to show that the environment is on a par with other key issues like national security.

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