German Departure Tax To Put Bigger Bite On Long-Haul Flights - Business Travel News

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German Departure Tax To Put Bigger Bite On Long-Haul Flights

September 01, 2010 - 01:10 PM ET

By Amon Cohen

Long-haul travelers will bear more of the brunt of an air departure tax voted through by the German cabinet Wednesday than was originally thought. Last month, a widely leaked draft of the legislation said the levy would be €13 for journeys of up to 2,550 kilometers and €26 on flights above that limit. However, today's final regulation has revised the scheme to €8 for flights within Europe, €25 to medium-haul destinations and €45 to long-haul destinations.

The tax will apply to all departures starting Jan. 1, but, in another surprise move, the German government announced that it immediately would levy the tax on all post-Dec. 31 bookings. Finance minister Wolfgang Schaeuble said the tax is being implemented without delay to avoid a rush of bookings aimed at pre-empting the tax.

German chancellor Angela Merkel first gave notice of the tax in June. It is part of an €80 billion austerity package of revenue-raising measures and spending cuts. Lufthansa headed a queue of air industry companies and organizations criticizing the move on Wednesday.

"We are against it because it is only applied on a national level," a Lufthansa spokesman told BTN. "It will significantly weaken Germany as an air traffic hub and therefore distort competition. As we are the largest German carrier, it will hit us especially hard. The relation of tax to distance will hurt us as an exporting nation and benefit foreign airlines and airports."

Not everyone will necessarily agree with Lufthansa's analysis of who will be hurt most. The tax does not apply to transfer traffic, which will give significant protection to the German flag carrier's international hubs at Frankfurt and Munich.

The German airline association BDF claimed that the tax would cost Germany five million passengers per year and 10,000 jobs.

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