IATA slams German departure tax on flights

Airline association IATA has slammed German plans to impose a departure tax on flights as fears grow of a squeeze on flying to manage government deficits.

German Chancellor Angela Merkel announced the tax on Monday as part of a multibillion-euro package of austerity measures. However, Merkel described the tax in environmental terms, calling it “a national ecological air travel levy”.

Details have yet to be announced, but it is believed the tax will add euro12 (£10) to every flight from Germany. The country currently has no tax on flights.

IATA director general Giovanni Bisagnani said: “This tax is a body blow to the weak economy and a fragile industry. It is a cash-grab by a cash-strapped government.” He told the association’s annual general meeting in Berlin: “The proposal should be axed.”

Just a day earlier, Bisignani announced a revision of IATA’s forecast for the year from a collective airline loss of $2.8 billion to a profit of $2.5 billion. However, he warned: “This is a long way from sustainable profitability. A major part of the global industry is still posting big losses.”

The German tax will be in addition to the UK air passenger duty (APD) on flights between the countries, which is currently £11 and due to rise to £12 from November. But unlike APD, the German tax will be removed when airlines join the European Union carbon emissions trading scheme in 2012.

The new UK government has promised to reform APD, changing it to a tax on aircraft and making it more related to the greenhouse gas emissions from a flight.

However, no details of the proposals have been released and there are fears the change could be allied to an increase in the total tax take.

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