France plans to introduce a tax on air fares of up to €18 per outbound flight next year, with the funds used to develop “less-polluting transport options”.
French transport minister Elisabeth Borne announced the aviation tax on Tuesday. However, the rates are well below those of Britain’s air passenger duty (APD).
Paris will levy just €1.5 on economy domestic and EU flights and €3 on economy fares beyond the EU. Business class fares will be taxed at €9 on EU flights and €18 beyond.
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Only flights to Corsica and French overseas departments will be exempt.
The tax is forecast to raise €180 million a year, to be invested in “greener transport infrastructure, notably rail”.
Borne said: “France is committed to the taxation of air transport. There is an urgency here.”
Shares in Air France fell almost 4% following the announcement. In a statement, Air France said the levy would “strongly penalise its competitiveness” when it needs to invest to reduce its carbon footprint.
However, the Transport & Environment group in Brussels, which lobbies for cleaner transport, said: “An €18 tax will have some minor impact on demand.”
EU finance ministers have recently debated plans for an EU-wide aviation tax to be presented to the new European Commission this autumn.
Airline association Iata criticised the French tax plan. Speaking in London, Iata chief economist Brian Pearce said: “We don’t see this as a very effective way to reduce CO2 emissions. It just seems to be a way of raising money.”
Rafael Schwartzman, Iata regional vice president for Europe, said: “France had a consultation on making the country’s aviation more competitive. It found the competitiveness of the industry was at risk. This tax will not help competitiveness.”
Iata UK and Ireland country manager Simon McNamara added: “We’re frustrated because the industry needs to be sustainable but there are much better ways of doing it.”
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