28-Jul-2010 9:16 AM

ELFAA labels German passenger tax 'perverse'

European Low Fares Airline Association (ELFAA) announced (26-Jul-2010) its opposition to a proposal by the German Government to introduce a tax on individual airline passengers from 01-Jan-2011 and urged the government to revise the tax. ELFAA stated the "supposed" objective of the proposed tax is to provide incentives for environmentally-efficient behaviour, yet there is negligible evidence that it will have the desired effect. It also criticised the limited time provided to respond to the draft of the tax. [more]

European Low Fares Airline Association: “Such a perverse tax will undermine the economic recovery in Germany and make mobility more expensive for both consumers and businesses. This in turn will result in decreased demand and subsequent capacity cuts in Germany as airlines are forced to move to other jurisdictions to secure their business. Moreover, independent studies estimate that there will be 10,000 job losses as a direct result of this tax. The unavoidable consequence of a per passenger tax means that empty aircraft will pay no tax, whilst more efficient aircraft that fly at full capacity will be unfairly penalised. Therefore, far from its stated objective, this law will actually incentivise inefficient operators and distort competition in favour of inefficient carriers,” John Hanlon, Secretary-General.

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