Europe’s airlines and airports have condemned suggestions that France is considering further aviation tax hikes as a quick fix to address the country’s soaring national debt.
Trade bodies A4E (Airlines for Europe) and ACI EUROPE (Airports Council International) urged the French government to reconsider such plans in the absence of an in-depth economic impact analysis.
They warned about the “significant damage” tax increases would inflict not just on the country’s aviation sector, but also on the national economy and hurdles that would be created for the effective decarbonisation of aviation.
The two industry groups also pointed to the precedents of countries such as Austria, Ireland, the Netherlands and just recently Sweden backtracking and having abolished or reduced their aviation taxes due to the negative spillover effect on their economies.
The concerns were raised ahead of a bill expected to be presented to the French parliament next week as the country seeks to cut its budget deficit.
ACI Europe director general Olivier Jankovec said: “Raising aviation taxes is the poster child of short-term thinking in politics.
“If confirmed, this new plan would inadvertently weaken the competitiveness of French aviation, penalise citizens and, ultimately reduce the sector’s economic contribution.
“As we have repeatedly pointed out, every 10% increase in direct connectivity leads to a 0.5% rise in GDP per capita. The French government would de facto choose quick cash over durable economic competitiveness.
“This plan is even more concerning given the aviation sector’s ongoing transformation to meet ambitious net-zero goals – with the recent Draghi report acknowledging that European aviation will need €61 billion every year to get there. If anything, more financial support from the government is what is required, not additional taxation.”
A4E managing director Ourania Georgoutsakou said: “This proposal to increase French aviation taxes would be counter-productive, would fragment the single aviation market and would undermine the competitiveness of French aviation.
“Any short-term revenue gains the government expects would be far outweighed by reduced connectivity, poorer consumer welfare and would set back aviation’s decarbonisation efforts.
“Diverting funds from the industry through increased taxes ultimately means less investment in crucial decarbonisation measures.”