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Eco-Tax Impacts KLM

Ulrika Lomas,, Brussels

08 October 2008

A Dutch eco-tax levied on air travel, aimed at compensating the environmental effects of flying, has deeply affected its key airline, KLM, reducing the number of passengers it carries and consequently resulting in a major loss of revenue.

KLM CEO Peter Hartman reported losses for the company estimated at EUR500,000, a result of 230,000 fewer passengers flying from Amsterdam’s Schiphol airport in July and August of this year as compared to the same period last year.

According to Hartman, the tax, introduced on July 1 of this year and levied at EUR11.25 per passenger on flights of up to 2,500km and EUR45 for longer journeys, will lead to a loss of EUR1m in revenue for Schiphol, as passengers are opting to fly from airports in neighbouring Belgium and Germany.

Calling on the government to reconsider the eco-tax in the light of the global financial crisis and rising fuel costs, Hartman expressed his concern about the negative effect of further taxes when European airlines are compelled to compensate their carbon dioxide emissions.

Despite objections by KLM and other aviation companies who took the case to the appeals court in the Hague, the tax ruling was upheld as the tax was not seen to contravene European law or the International Civil Aviation Convention.

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