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German ‘green tax’ to raise air ticket prices

Germany will raise levies on all flight tickets, both domestic and long-haul trips, according to an air transport bill. germany green tax

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As part of a broader “climate package” intended to bring Europe’s largest economy back on course towards emissions reduction targets, taxes on flights up to 2,500 kilometers will increase 74 percent, to €13.03.

The planned tax increase will “find a direct route to prices for air travelers,” according to the 10-page draft, a copy of which was seen by Bloomberg. “Especially where discount air carriers are concerned — travelers will find that the tax will make up a significant part of the total ticket price.

Critics of the plan include the BDL air industry lobby and Ryanair Holding Plc. They say the tax increase won’t reduce flight emissions and will have a bigger impact on high-volume budget carriers than on national airline Lufthansa AG.

HOW TAX ON AIR TICKETS WILL RISE IN GERMANY FROM 2020:

  • Domestic and Europe: 13.03 euros ($14.33) from 7.50 euros, a rise of 74 percent
  • Mid-haul: 33.01 euros from 23.43 euros
  • Long-haul: 59.43 euros from 42.18 euros
  • Tickets at dumping prices — meaning below-cost price — will be banned

HOW RAIL AND TAX RECEIPTS WILL BENEFIT

  • Rail ticket value-added tax drops to 7 percent from 19 percent, reducing prices by about a tenth
  • More expensive air tickets will raise tax revenue by about 740 million euros, easily covering lost rail VAT

The government will raise an extra 500 million euros ($549 million) annually from air tickets, according to the draft. In exchange, the public-owned rail company Deutsche Bahn AG will halve its 19% VAT rate on tickets, passing the savings directly to travelers.

 

Despite the growing Fridays for Future climate protest movement,  the number of flight passengers in Germany is increasing germany green tax

The Swedish concept of “Flygskam”, or flight shame, has still taken hold of many people across the globe.

One in five Americans and Europeans say that they are taking at least one flight less per year due to climate change concerns, according to a study by 6,000 Americans and Europeans by Swiss Bank UBS.

Nonetheless, the International Air Transport Association (IATA), an umbrella organization of airlines, predicted in September that the number of air travelers will double in two decades.

In the 12 months between August 2018 and July 2019, there were a total of 125.1 flight passengers in Germany, according to the data analyzed by RP Online on Wednesday. That’s up from a total of 119.4 passengers between July 2017 and July 2018.

 

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