AEA: Who’s next? Austria joins the list of airline passenger tax collectors
02-Nov-2010 The Association of European Airlines, representing Europe’s most important network carriers, has condemned the decision of the Austrian government to impose a departure tax on airline passengers, of €8 for shorthaul journeys and €40 for longhaul.
AEA is particularly critical of the depiction of the tax as an eco-levy which will lead to reduced carbon emissions, when its purpose is clearly to plug a budget deficit.
"If the intention is to boost fiscal revenues, I fear that the Austrian Government may find that it has got its sums wrong", said AEA Secretary General Ulrich Schulte-Strathaus. "They should learn the lesson of the Netherlands, which abandoned its own passenger tax in 2009 after just twelve months, when it was discovered that it had cost the economy a billion euros, in return for just €300 million in revenues".
In the Dutch case, many passengers chose to avoid the tax by driving to Brussels or Dusseldorf - hardly a 'green' option - and the Austrian experience would be very similar, said the AEA Secretary General. "Bratislava Airport is just 80km and less than an hour's drive from Vienna - and Vienna Airport is an economic powerhouse; can it afford to hand such an advantage to its competitor just down the highway?" He reminded that the tax would hit not only Austrian travellers, but visitors to the country, particularly those on longhaul flights. "Vienna is - deservedly - a magnet for tourists from around the world, but it will certainly lose some of its attractiveness if every longhaul visitor would have to pay an extra €40 for the experience".
The tax announcement was all the more inopportune in the context of last week's European Aviation Summit, organised by the Belgian Presidency of the EU, in which the international competitiveness of European air transport was seen as being under threat, and urgently in need of political attention. Indeed, the 'Bruges Declaration' which emerged from the Summit stated that it was necessary to 'Maintain and improve a competitive European aviation industry ... in that context, avoid additional burdens (e.g. taxes on aviation) affecting European carriers' competitiveness'.
Austria was proposing to tax both business and leisure - the two principal reasons for travel - said Ulrich Schulte-Strathaus. "It will increase the cost of doing business at a time when economies are struggling out of recession. And it will penalise leisure travellers, who have already endured hardships during the last two difficult years, perhaps even putting the cost of their holiday beyond their reach".