Norwegian government introduces approx €8.5 tax per air passenger on all flights
The Norwegian government will introduce an Air Passenger Tax, starting on 1st June 2016. It will be at the rate of a 80 Krone charge (around €8.64, £6.59, US$9.67) per person for both domestic and international flights. Exceptions of the tax include those under two years old and those transiting flights on the same airline. The airlines have, predictably, reacted with fury at being “defied” by the government. They say this tiny tax “threatens to reduce demand by 5%, equal to 1.2 million passengers a year,” and they say it could mean airlines might lose €150 million per year as a result. The airline lobby group, “Airlines 4 Europe” (whose members include EasyJet, Ryanair, Lufthansa, Norwegian Air Shuttle and International Airlines Group) is lobbying hard. They all completely ignore the inconvenient fact that air travel demand is artificially high, as it pays no VAT and no fuel duty. Those together amount to a massive annual subsidy (in the UK this is a net annual loss to the Treasury, even including takings from APD, of perhaps £9 blllion per year). Several European countries do have a ticket tax, with the UK levels being the highest (Brits also fly more than most others). There are small charges in France, Germany and Austria. Ireland and the Netherlands scrapped theirs, due to airline pressure.
Norwegian government set to defy airlines with launch of air tax
Airlines for Europe has slammed the Norwegian government for the planned introduction of a new air tax this summer.
The International Air Transport Association claims the tax, to be set at around €8.5 per person for both domestic and international flights, threatens to reduce demand by 5%, equal to 1.2 million passengers a year.
It estimates airlines will lose €150 million a year as a result.
“We are astonished about the unwavering approach of the Norwegian authorities on implementing the Air Passenger Tax while almost all comments during the public consultation period contained objections to it,” said A4E chairman Thomas Reynaert.
“Instead of preventing economic growth and job creation by imposing unreasonable taxes, European governments should create a supportive regulatory environment.”
“Unavoidably, the proposed tax will lead to fewer operators in the Norwegian aviation market and reduced competition.
“If already the Norwegian competition authority states that airports may have to consider ceasing their operations due to reduced traffic the government deliberately wants to stifle the travel sector.”
A4E said the Dutch government’s decision to remove its ticket tax in 2009 led to ‘strong growth’ in passengers; the Irish government’s removal of traffic tax in April 2014 led to ‘extensive traffic growth’ at Irish airports and an 8% increase in tourism last year, while the number of Northern Ireland residents flying from Dublin increased by 52% in the first year, it said.
Accountants PwC claims its economic analysis shows that removing UK Air Passenger Duty would boost British GDP by 1.7% and create 60,000 new jobs by 2020.
Middle Eastern airports now adding air passenger charges, to pay for airport infrastructure
As well as the UK charging Air Passenger Duty, Germany, Austria, France, Spain and Norway and others have a comparable charge. Germany has the second highest charges in Europe after the UK with levels of around €7, €23 and €42 for different bands of countries. Norway now has a charge of about €8.50 on all flights. But other airports else where in the world are increasingly charging. Hong Kong has now started a charge, of around £14 – 16 depending on length of flight and class of seat, in order to pay for the 3rd runway. The charges may last till 2031 when the runway is fully paid for. Now Middle Eastern airports have started to charge all passengers, to contribute towards the cost of the huge airport infrastructure. Dubai introduced a charge of around £7 for all passengers, except children under the age of two and transit passengers remaining on the same plane. Abu Dhabi also introduced the same fee as did Sharjah – all started on 30th June. Now Doha’s Hamad Airport says it will introduce a Passenger Facility Charge of about $10 for all departing passengers, together with transferring passengers who make a connection within 24 hours. It will come into effect on December 1st. Australia has had a Passenger Movement Charge since 1995 for any departing passenger on an international flights, at around £31.
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List from EBAA in Jan 2013 (so a bit out of date now) of all the various taxes by European countries, on flights.
Also some information on departure taxes in various countries from Wikipedia (bit out of date, in 2012) at https://en.wikipedia.org/wiki/Departure_tax
IATA complained [well, it would, wouldn’t it?] about the tax when it was proposed in November 2015:
IATA Statement on Proposed Norwegian Air Passenger Tax
The International Air Transport Association (IATA) expressed its extreme disappointment with the announcement of a NOK80 (plus VAT) air passenger tax on departing flights. Air links to, from and within Norway carried nearly 29 million people last year. More than 100,000 jobs, and NOK120 billion in GDP is supported by commercial aviation in Norway, and the tax will only serve to damage tourism and the Norwegian economy. The tax, due to commence from April 1 2016, is based on unpopular and unsuccessful passenger taxes that have been introduced in a small number of countries – and later withdrawn in some, e.g. in Ireland and the Netherlands.
As a measure to raise revenue, the tax will be counter-productive. Aviation is an engine for driving economic growth. The long-term productive capacity and efficiency of the economy is enhanced by strong air connectivity, which in turn leads to a larger tax-take for the government.
“This passenger tax is a nonsense and will fail on every measure. Norway covers a very large territory and its major population centers are spread out. Aviation is the best – sometimes the only – way to connect these communities. It makes little sense to constrict air transport when it can add so much to Norway’s economy and society,” said Rafael Schvartzman, IATA’s European Regional Vice President.
If the intent of the tax is to account for Norway’s share of the 2% of global CO2 that aviation is responsible for, then this is a blunt instrument which will have practically no effect. Moreover, many passengers face being triple-taxed. Domestic travelers already pay a domestic pollution tax and the European Emissions Trading Scheme. Norway should instead work to ensure the success of the negotiations for a global measure for aviation to achieve carbon-neutral growth from 2020.
“It is particularly alarming for the industry that this proposal has emerged without warning, and with no consultation. This is counter to every regulatory best practice and out of character for Norway, which previously has held a reputation for good governance. April 1st is a traditional date for practical jokes, but imposition of this tax next year would be no laughing matter for millions of Norwegian air travelers and the many businesses that rely on air links,” said Schvartzman.
Irish Republic to scrap air travel tax – which was only €3 (had been €2 and €10 till 2010)
The Irish government has announced that it will be scrapping its tax on air travel. At present there is a tax of just €3 per flight, and this will end in April 2014. This has led to concerns about the potential impact on Northern Ireland’s airports, where there is still Air Passenger duty of £13 per passenger (€26 per return flight) for short haul flights (not for long haul flights). Ryanair has immediately said it will increase its traffic at Irish airports by one million passengers a year – which is rather surprising, if the difference in tax from what it is now is just €3. It is not thought likely that many people will travel from Northern Ireland to Dublin to save €20 – the trip there and back might cost more. George Best Belfast City Airport said the move was “very unlikely to cause a stampede to Dublin for cheap flights”. Stormont Finance Minister, Simon Hamilton, said the move by the Republic was “not really a surprise” and that it would be prohibitively expensive for Northern Ireland to match the cut. “The cost to the NI block grant and other public services would be significant – between £60 – £90 million a year,” he said.
Other countries that have air ticket taxes:
The UK, Germany and Austria have air ticket taxes. http://www.airportwatch.org.uk/?p=4444
Spain also has an air ticket tax, and France has a Passenger Solidarity Tax http://www.airportwatch.org.uk/?p=2585
Tourists to Spain face extra airport tax
Spain has increased the amount of departure tax it charges. The increase will be, on average, only perhaps 20% above the current level, but from the largest Spanish airports, it will be almost doubled. This will mean a rise of some €5 to €9 or so. The tax is charged to the airline, and they can choose whether to pass it on to the passengers – Ryanair certainly will get its passengers to pay. The tax is applied “retrospectively to customers who booked flights before 2 July 2012 and are travelling from 1 July onwards. Spain is implementing drastic measures to try to slash its budget deficit to 5.3% from 8.5% in 2011.
Dutch Government ditches eco ticket tax in efforts to halt declining traffic at Amsterdam Schiphol
Mon 30 Mar 2009
The Dutch Government is to scrap from July 1 its air passenger ticket tax, first dubbed the ‘eco’ tax when it was introduced against major opposition by aviation and local industry last year. The controversial departure tax, which ranges from 11 to 45 euros, is blamed for a steep decline in passenger traffic at the main Dutch airports, particularly at Amsterdam Schiphol. The move was welcomed by airlines, particularly those from the low-cost sector, who called for similar taxes to be abandoned in Italy, Ireland and the UK.
The tax was expected to raise around €300 million ($395m) a year but a commissioned report concluded that it would cost the Dutch economy €1.3 billion ($1.7bn) in lost revenue. At a time when the Government was trying to underpin the economy, reports aviationwatch.eu, the Dutch transport ministry, backed by the aviation industry, business, tourism and right-wing parties, won the day against the environment ministry that had fought to keep the tax.
Schiphol Group, which operates Amsterdam Schiphol, Eindhoven, Rotterdam and Lelystad airports, said it had been hit by a strong decline in traffic and increasing international competition, and recently announced cuts in its work force of 10-25% by the end of next year. Schiphol Airport, Europe’s fifth biggest in terms of passenger enplanements, recorded a drop of 430,000 passengers in February, a 13.7% fall against the same month a year ago. The number of locally boarding passengers fell by 17.7%. The number of transfer passengers, who were exempted from the tax, declined by 8.5%.
The airport operator along with Dutch carrier KLM had previously warned that potential passengers would try to avoid the tax by flying from airports across the border in Belgium or Germany. The Belgian Government has already abandoned a proposal to introduce a similar tax.
The European Low Fares Airline Association (ELFAA) welcomed the “enlightened” decision to lift the tax, claiming it was discriminatory in that it was only levied on passengers starting their journey in the Netherlands and exempted cargo flights and transfer passengers. It urged the governments of Italy, Ireland and the United Kingdom to follow the Dutch lead in dropping airline passenger taxes.
Major low-cost operators including Ryanair, easyJet and Flybe voiced similar sentiments. “Ryanair has campaigned against high airport taxes and so called ‘eco’ taxes, which deter visitors and has cost the Dutch tourism industry millions in lost revenue,” said a spokesman for the carrier.