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German Air Tax Deters Budget Airline Ryanair

by Ulrika Lomas,, Brussels

14 July 2010

Budget airline Ryanair has threatened to withdraw planes from Germany following the recent announcement by the country’s coalition government of plans to introduce a tax on domestic air travel.

According to the head of Ryanair, Michael O’Leary, the levy would without doubt lead to a withdrawal of planes from German airports Hahn, Weeze and Bremen, where planes are currently stationed. Ryanair would also reconsider plans to fly to other German locations, he added. Planes could, for example, be stationed in countries such as Spain or Holland where there is no air tax.

Germany’s coalition government aims to impose a tax on all passengers flying from German airports by 2012. Estimates have revealed that ticket prices could increase by between EUR12 and EUR15 as a result of the levy, affecting flights to Europe less than long-haul flights. The government does not intend to impose a tax on private jets, and passengers with connecting flights will only be taxed once. The contribution is due to generate in the region of EUR1bn a year in additional revenue for the government.

Representatives of the air travel industry, gathered together recently for a meeting in Mainz, have drafted a joint resolution to the German government protesting against the introduction of the proposed tax, and urging the government to reconsider its plans. Airports and airlines fear an exodus of passengers to foreign countries close to the border as a result of the tax.

In a recent release on behalf of Ryanair, Michael O’Leary states that:

“The German government’s proposed tourist tax will make Germany an uncompetitive, expensive tourism destination which will result in lost visitors, lost jobs, lost tourism revenues and end up costing Germany far more than the tax will generate.”

“Independent analysis by RDC Aviation proves that countries which impose tourist taxes continue to see capacity, traffic and tourism declines. Growth has returned throughout Europe except in countries such as Ireland and the UK which continue to tax tourists instead of welcoming them.”

“As the Dutch experience proves, tourist taxes are deeply damaging and self-defeating and we hope that the German government will see sense and scrap their plans for a tourist tax.”

TAGS: individuals | tax | air passenger duty (APD) | Ireland | aviation | Germany

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