The International Air Transport Association (IATA) has strongly criticized Germany’s recent increase in aviation taxes, citing detrimental effects on both the economy and environmental sustainability efforts within the aviation industry.
Effective May 1, aviation taxes in Germany have surged by 19%, with passenger fees now ranging from EUR 15.53 to EUR 70.83 depending on the flight route. This tax hike is expected to negatively impact Germany’s competitiveness in key sectors such as exports, tourism, and employment, while also impeding the recovery of air transport post-pandemic, which lags behind other EU countries.
Willie Walsh, IATA’s Director General, stated,
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.
Moreover, IATA warns that the tax increase will hinder the industry’s efforts to decarbonize. Aviation aims to achieve net-zero CO2 emissions by 2050, and sustainable aviation fuels (SAF) are crucial to this goal. However, the German government’s decision to divert aviation tax revenues away from SAF production contradicts its previous commitment. This tax hike also makes it harder for airlines to invest in SAF, adopt fuel-efficient fleets, and implement other decarbonization measures.
Walsh further commented,
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.
