The International Air Transport Association today savaged plans announced yesterday by German chancellor Angela Merkel to introduce an air departure tax that could raise fares by up to €14. "This is the worst kind of shortsighted policy irresponsibility," said IATA director general and CEO Giovanni Bisignani at the closing speech of the association's annual meeting, staged coincidentally in Berlin. "It's a cash-grab by a cash-strapped government."
Details of the new tax are sketchy, but Merkel said it is intended to raise €1 billion per year. Although announced as part of a package of austerity measures, including other new taxes and €80 billion of cuts in public spending, she positioned the departure charge as an "ecological tax." The amount imposed will vary according to noise level and fuel consumption of the departing aircraft. Early estimates from analysts forecast that it will cost €8 to €14 per passenger.
"Painting it green adds insult to injury," said Bisignani. "There will be no environmental benefit from the economic damage caused. This is not the time to burden the aviation industry with more taxes. European GDP growth is expected to be 0.9 percent this year—the lowest among the world's major regions. Operating in this environment, Europe's airlines will be the only region in the red, with losses of $2.8 billion. This tax is a body blow to the weak economy and a fragile industry, and it is a kick in the teeth to travelers at a time when they can least afford it."
Bisignani pointed to the failure of a similar tax
introduced and then scrapped by the Dutch government last year after evidence that it led to a fall in air ticket sales. However, the United Kingdom has steadily increased its air passenger duty over several years to as much as £110 per trip. The United Kingdom's new coalition government
is set to change the duty to a charge per aircraft instead of per passenger, leading to forecasts this could increase the amount paid by travelers by up to 40 percent—although the Guild of Travel Management Companies believes it could fall instead.