Airline Industry Laments Germany’s Air Travel tax

The airline industry came down heavily on Germany’s announcement of a new ‘ecological air travel levy’, a new air travel tax. The move is as an attempt to grab cash by a “cash-strapped government” in Berlin in the garb of environment, said Giovanni Bisignani, IATA DG and CEO at the concluding day of IATA’s annual meeting on Tuesday.

Angela Merkel, Chancellor of Germany shocked the industry by announcing the new tax plans on Monday. The government hopes to mop up 1 billion euros through the new tax, which is a part of various budgetary measures amounting to 80 billion euros.

The tax would translate into rise in price by 8 to 16 euros per passenger, according to a rough estimate. Wolfgang Mayrhuber, Chairman and CEO of the German carrier Lufthansa said, there is no way the burden can be passed on the passengers. Terming the decision a “black day” in the industry, he said, the decision would result in loss of traffic and drive the passengers to airports in other countries.

Governments across Europe are struggling to bolster their economies against the impact of recession and a deepening debt-crisis that has hit the region. Europe’s aviation industry has been one of the worst hit in the economic turmoil, and also by the loss of revenue due to airspace closure on account of volcanic ash.

Germany is not the first country in Europe to have this tax. Recently, Netherlands, Ireland and Britain have imposed similar taxes.

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