Austria follows the lead of Germany with new environmental tax on departing passengers
(photo: Vienna Airport)
Thu 28 Oct 2010 – Following on the heels of Germany, Austria is the latest to announce that it too would introduce an ecological tax to be paid by all airline passengers departing from the country’s airports. Passengers will be charged 8 euros ($11) for intra-European flights and 40 euros ($55) for long-haul flights. The tax is expected to raise between 40 and 60 million euros in 2011. Airline representatives have accused the Austrian government of following other EU states like Germany and the UK in using the environment as a thinly-disguised revenue earner. Speaking at the recent President’s Assembly of the Association of European Airlines (AEA), British Airways CEO and AEA Chairman for 2010 Willie Walsh said Europe’s airlines would not be able to compete abroad if weighed down by taxes and charges at home.
Austria’s ruling federal coalition unveiled the departure tax as part of a wider austerity package of new taxes, including on petrol, and spending cuts. It follows the introduction of departure fees ranging between 8 euros and 45 euros by the German government on 1 September.
Sylviane Lust, Director General of the International Air Carrier Association (IACA), which represents 33 airlines serving the leisure industry, said: “This is an obvious attempt by the Austrian government to jump on the same band wagon as Germany and introduce a thinly-disguised ecological tax to take money from airline passengers for their own coffers. The plans for this tax seem to have been announced without any consideration for the effect on airlines, passengers, the economy and the environment.
“These types of taxes are not the way to reduce aviation emissions. European governments would be better off spending their time trying to achieve the Single European Sky, which will have a much greater impact on lessening emissions in Europe.
“The news comes at the end of a very difficult year for airlines and carriers can ill-afford any additional pressure on passenger demand.
“This type of tax is spreading across Europe. It has been withdrawn in the Netherlands after passengers sought alternative airports to depart from to avoid paying the tax.
“I would urge the Austrian government to re-consider its plans to introduce this ill-conceived ticket tax.”
Also condemning the move, AEA spokesman David Henderson said: “It is manifestly not an environmental levy, it is a means to reduce a budget deficit in the wake of the economic downturn, the banking crisis and the rescue package for the Euro. It is unfortunate that any tax proposal nowadays seeks to justify itself with the ‘eco’ label.
“It will hurt Austrian citizens and it will hurt Austrian business – which was discovered by the Dutch when they introduced, and subsequently withdrew, their own travel tax – and which was recognized by the Belgians when they abandoned their own proposals. It is all the more remarkable in the case of Austria, where Bratislava Airport is just 80km and less than an hour’s drive from the centre of Vienna – although I have no doubt that the highway between the two will see a heavy increase in traffic.
“It’s all the more ironic that the ‘Bruges Declaration’ which accompanied the European Aviation Summit just ended, sees the necessity to ‘maintain and improve a competitive European aviation industry … in that context, avoid additional burdens (for example, taxes on aviation) affecting European carriers’ competitiveness’. Mixed messages indeed.”
Meanwhile, Europe’s largest low-cost airline Ryanair is to cut more than a quarter of its flights from its Frankfurt Hahn base, blaming the introduction of the German ‘eco’ passenger departure tax. The airline said the new tax made the country an uncompetitive tourist destination. It suggested the German government should consider the damaging impact of similar taxes imposed elsewhere in Europe and withdraw its departure tax.
Speaking on behalf of AEA members at the association’s recent President’s Assembly, British Airways CEO Willie Walsh said: “Our success is Europe’s success. But if we are weighed down by taxes and charges at home, we can’t compete to the best of our ability abroad. We cannot compete sustainably for passengers, if, as a result of government intervention, non-European hubs benefit, thereby drawing passengers, cargo, employment and economic growth away from Europe.”