Taming Aviation: 250,000 demand end to scandal of Europe’s airline subsidies, tax exemptions night flights
A ground-breaking coalition of 140 groups representing 250,000 citizens from 10 European countries has, for the first time, called on the EU to end commercial airlines’ tax exemptions and subsidies – and phase out night flights. The Taming Aviation coalition formally presented its demands in a petition to the European Parliament in Brussels on 18th November. The petition calls for an end to the absurd situation where European governments miss out on €40 billion every year because commercial airlines pay no tax on fuel and are exempt from VAT. Cash-strapped EU governments are missing out on this important revenue source, so European taxpayers must step in to fill the deficit. The subsidies are fuelling air traffic growth, with aviation’s greenhouse gas emissions expected to increase 300% by 2050. The petition also demands action to reduce aircraft noise, which poses serious health risks to people living under flight paths including increasing the risk of dying of a heart attack by up to 50%. 25 national delegates from Austria, Belgium, France, Germany, Italy, The Netherlands and the UK were present at the event.
250,000 demand end to scandal of Europe’s airline subsidies, tax exemptions and night flights
Brussels, 18 November 2014 (Taming Aviation)
The petition being handed over by Dr Susanne Heger and Dr Jutta Leth, to the Parliament Petitions Committee chair, Cecilia Wikström
T&E distributed this release on behalf of Taming Aviation coalition
A ground-breaking coalition of 140 groups representing 250,000 citizens from 10 European countries has, for the first time, called on the EU to end commercial airlines’ tax exemptions and subsidies and phase out night flights. The Taming Aviation coalition formally presented its demands in a petition to the European Parliament in Brussels today.
The petition, presented to the Parliament Petitions Committee chair Cecilia Wikström and Green MEP Keith Taylor, calls for an end to the absurd situation where European governments miss out on €40 billion every year because commercial airlines pay no tax on fuel and are exempt from VAT.  It also demands action to reduce aircraft noise, which poses serious health risks to people living under flight paths including increasing the risk of dying of a heart attack by up to 50%. 
25 national delegates from Austria, Belgium, France, Germany, Italy, The Netherlands and the UK were present at the event. The citizens’ coalition has highlighted the disparity where consumers, small businesses and hauliers pay an average of 48 cent in tax per litre  while commercial airlines in the EU don’t pay a cent in tax to fuel their planes.
Cash-strapped EU governments are missing out on this important revenue source, so European taxpayers must step in to fill the deficit. This subsidising is fuelling air traffic growth, with aviation’s greenhouse gas emissions expected to increase 300% by 2050. 
Dr Susanne Heger, initiator of the Taming Aviation coalition, said: “With air passenger numbers set to grow 4% a year for the next 20 years, the aviation sector can well afford to pay its way. EU governments continuing to allow commercial airlines to free ride to the tune of €40 billion a year with tax exemptions while their night flights pose serious health risks is nothing short of a scandal.” 
The petition is also in response to growing recognition of the health risks posed by night flights. Citizens living under certain flight paths are exposed to daily average noise levels of at least 60 decibels and consequently are up to 50% more at risk of dying of a heart attack, according to a study by the University of Bern.  Up to 200,000 people living under London’s Heathrow flight paths are exposed to this increased risk as they experience noise averaging over 60 decibels.
Keith Taylor, Green MEP for South East England, said: “Why should aviation be excused from paying tax, especially in view of its environmental damage? It should pay VAT and excise duty just like all other transport methods, so that all the costs of flying are properly accounted for.”
Notes to editors:
 CE Delft, Estimated revenues of VAT and fuel tax on aviation (2013). http://www.transportenvironment.org/sites/te/files/publications/CE_Delft_7B52_Estimated_revenues_of_VAT_and_fuel_tax_on_aviation_def.pdf
 Huss, Spoerri, Egger, Röösli, Aircraft Noise, Air Pollution, and Mortality from Myocardial Infarction, Epidemiology (2010).
 Transport & Environment, Does aviation pay its way? (2013). http://transenv.eu/1xd4CEc
 ICAO, Global Aviation CO2 Emissions Projections to 2050 (2012), slide 8. Based on ICAO’s most optimistic projection. http://www.icao.int/environmental-protection/GIACC/Giacc-4/CENV_GIACC4_IP1_IP2%20IP3.pdf
 Growth projections from IATA’s 20-Year Passenger Forecast (2014).
 Huss, Spoerri, Egger, Röösli (2010).
Below is some of the media coverage from European countries, in various languages, of the Taming Aviation event:
ENDS Europe: Best of the web link to our release: http://www.endseurope.com/home
EurActiv will publish today – if Boeing, a key sponsor of the site, does not veto it!
DPA (Germany’s press agency) got distracted by other news stories and didn’t publish in the end.
Suddeustche Zeitung: Print clip from print version.
A European-wide Movement of Citizens aimed at Taming the Aviation Industry
to the European Parliament
- to impose an absolute and unconditional ban on night flights (landing and take-off) at all European airports for an uninterrupted eight-hour interval as a minimum standard of protection for human health;
- to impose Energy Tax on aviation fuel within the shortest possible time, in the interim to lift the suspension of EU-ETS for aviation;
- to abolish any form of VAT zero-rating and VAT exemptions of airline tickets and to include aviation into the VAT tax system of the European Union at standard rates;
- to prohibit any form of incentive at European airports, such as subsidies, kick-backs and rebates, and to ensure that infrastructure services of airports have to be provided on the basis of general, comprehensive and transparent tariffs.
In the last two decades pollution caused by civil aviation has increased dramatically. As of today aviation threatens the habitat of human beings, it menaces their health, depreciates their houses and seriously affects their quality of life. This development is also a consequence of tax and political privileges, which lack any socio-economic justification whatsoever. We cannot allow aviation to continue to operate in this predominant and uncontrolled role, aviation must be tamed. It is high time for Taming Aviation.
Take-offs and landings cause significant noise pollution; the effects of aircraft noise on human health are diminished through abstract noise calculations which are far from the real perception of human beings. Even the necessity to sleep, a minimum requirement of any human being, is not respected as such.
Aviation is one of the biggest climate polluters, nevertheless it is specifically exempt from Energy Tax and the EU Emission Trading System has been “suspended” for aviation. Additionally, air passenger transport is exempt from Value Added Tax. Thus aviation does not follow the principle of “true costs” and does not adequately contribute to tax revenues. There is no justification whatsoever for these tax privileges, which lead to a huge shortfall in taxes for the Community.
Airports attract airlines with various types of “incentives”. Such incentives lead to a lack of transparency, create artificial demand for aviation transport services and cause economic distortions.
Aviation is exempt from Energy Tax
Aviation is the most climate-intensive form of transport. Therefore it is even more distorting that aviation has been spared from taxation of energy which has been introduced on a EU-wide basis:
Since 2003 every form of energy, including car fuel, electricity, oil, even coal and coke, are subject to Energy Tax introduced by Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity. However, according to Art. 14 of this Directive Member States have to exempt fuel for the purpose of air navigation from Energy Tax. Thus Art. 14 of the Directive prolongs the long-standing tradition of the EU and its Member States to grant privileged tax treatment to the aviation industry.
- The first part links the amount of tax to be paid to the content of energy of the source in question. Unless Art. 14 of the Energy Tax Directive will be lifted aviation will not be subject to Energy Tax related to the content of energy.
- The second part of Energy Tax shall be levied on the amount of emitted carbon dioxide (CO2). This part of Energy Tax will only be applied to such sources of energy which are not part of the European Union’s trading system in CO2-Emission Certificates (EU-ETS). Therefore, and as aviation participates in the EU-ETS (although only formally, because currently suspended), aviation will not be not subject to the CO2-related part of Energy Tax as well.
As a result, aviation fuel is and will remain free from any tax on energy. And even though critical voices have been raised (such as by the European Union’s Economic and Social Committee, the European NGO Transport & Environment) the EU Commission does not intend to abolish this subsidy of the aviation industry.
Concerns raised in the European Parliament have so far been ignored as well (March/April 2012): „Air and maritime navigation: Directive 2003/96/EC obliges Member States to exempt from taxation fuel used for non-pleasure air and maritime navigation. Members consider that such exemptions are not in line with the aim of creating a level playing field among the various modes of transport. They should therefore be phased out.“
The inclusion of aviation into the EU-ETS is not a substitute for energy taxation. It may serve as an interim measure to cover the time gap until proper energy taxation is applied to aircraft fuel but it cannot establish a system of fair taxation.
We demand that aviation is fully subjected to energy tax within the shortest possible time, in the interim we demand the immediate lifting of the suspension of EU-ETS for aviation.
Value Added Tax
Aviation is exempt from VAT
The EU’s exemption of airline tickets from VAT, while allowing airlines to deduct input VAT, remains amongst the most distorting features in the EU’s tax and transport policy.
There is not a single argument to justify this tax privilege:
- Air tickets are a consumer product like any other consumer product. Still, air tickets are tax exempt while consumer products for everyday life (even those which serve basic needs) are subject to VAT;
- The VAT exemption results in a tax revenue shortfall for the member states of about €10bn (assuming an average VAT rate of 20%). Revenue shortfalls due to non-existent aviation taxes need to be made up by higher taxes in other sectors of the economy, in particular in areas such as employment.
Although passenger travel by air is covered by VAT legislation1, EU Member States use a succession of historical derogations stemming back in some cases to their accession to the EU to exempt (zero-rate with refund of tax paid at preceding stage) airline tickets from VAT for all international flights (including intra-EU flights). Article 371 of the EU-VAT Directive allows Member States which had exempted passenger transport on 1 January 1978 to continue to do so. Countries which joined the EU after 1 January 1978 enjoy the same privilege according to Title XIII, Chapter 1, Section 2 of the EU-VAT Directive.
The exemptions apply to international passenger transport services within and outside the EU. VAT for tickets on domestic flights are charged in all EU member states (at varying rates) with just a few exceptions.
As a result there is no VAT on any aspect of international air travel, not on airline tickets, nor on purchase of aircraft, nor on their servicing, nor on their fuel, nor on air traffic control, nor on baggage handling, nor on aircraft meals. Everything to do with air travel after passport control is zero rated.
Abolishing zero-rating for air tickets broadens the tax base and moves taxation towards indirect taxation in line with the European Commission’s growth strategy, in addition it greens the tax system. In the Summary Report of the Outcome of the Public Consultation on the Green Paper on the Future of VAT, launched by the European Commission, participants have expressed serious concern about the distorting effects of the current VAT system, only air and maritime companies, which enjoy the privileges of the current system, prefer to maintain it.
We demand to abolish any form of VAT zero-rating and VAT exemptions of airline tickets and to include aviation into the VAT tax system of the European Union at standard rates.
1) Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (as amended by Council Directive of 7 December 2010).
Airline Ticket Taxes
Several countries have introduced airline ticket taxes. They are a hardly notable substitute for those taxes which are inherent in the system, namely VAT and Energy Tax.
A survey conducted by Transport & Environment shows that approximately 60% of the market for flights leaving EU countries are covered by airline ticket taxes.
Overview of Airline Ticket Taxes in the EU in 2011 (in EUR):
|Short haul (roughly <3000 km)||Medium haul (roughly 3000 – 6000 km)||Long haul (roughly >6000 km)||Market share|
|UK||14||28||70||141||88 – 100||176 – 200||25%|
|*reduced to 7 Euro
**reduced to 15 Euro
The following example taken from Austria illustrates that Airline Ticket Taxes are a hardly notable substitute for Energy Tax. The calculation of the revenue shortfall in this example does not include the VAT shortfall due to the VAT exemption on all non-Austrian flights:
In 2011 Energy Tax on fuel for road transport was applied at the rate of EUR 0,482 per litre. An equal taxation of aviation fuel would have generated EUR 416,8 million in taxes. In 2012 airline ticket taxes amounted to EUR 59,6 million. Thus, in 2012 Austria granted the aviation industry an Energy Tax benefit of EUR 357,2 million. In 2013 this tax benefit will even be higher, since ticket taxes have been reduced. (Source of Information: Österreichischer Verkehrsclub – VCÖ 2012).
and plenty more on the Taming Aviation website
which is in English at http://www.tamingaviation.eu/index.php?id=27&L=1