Airlines welcome decision by Belgian Government to drop proposals for an airline passenger tax
Mon 10 Nov 2008 – Protests by airlines, airports and tour operators have succeeded in overturning a recent proposal by the Belgian Government to impose an airline passenger ticket tax that was intended to raise an estimated 132 million euros ($170m) annually. An online petition to stop the tax gathered 36,000 names in just two weeks. Meanwhile, the European Parliament’s rapporteur on the directive to include aviation into the EU ETS has criticized the UK and the Netherlands on their refusals to earmark revenues for climate change mitigation.
The decision to scrap the Belgian passenger tax proposal “brought a note of sanity to the ticket tax debate”, said Ulrich Schulte-Strathaus, Secretary General of the Association of European Airlines (AEA), noting that Denmark had withdrawn a similar tax in 2007 and Malta had rescinded a tax on outgoing passengers earlier this month.
“It has become fashionable for governments to plunder the airline industry and its customers, and cynically pretend they are doing so for the sake of the environment,” he claimed.
“It should come as no surprise that the U-turn should have been prompted by the realization that aviation brings jobs and prosperity, and is an essential part of national and regional infrastructure. Taxing a national asset is just plain crazy.”
John Hanlon, Secretary General of the European Low Fares Airline Association (ELFAA), believed the decision was a victory for passengers. “A tax on air tickets would have been the wrong move at the wrong time,” he said. “We congratulate the Belgian Government for turning away from a proposal that would take money from ordinary citizens. It would also have dealt a very punitive blow to the industry, which is already reeling from the combined shock of global economic downturn and volatility in fuel price.
“Denmark scrapped its flight tax last year, while Sweden and now Belgium have abandoned their plans to introduce a tax. The UK is also reforming its tax to make it greener and fairer. We now call on the Netherlands to scrap the counterproductive holiday tax that was introduced on 1 July, and on Ireland to abandon its tax plans.”
James C. May, President and CEO of the Air Transport Association of America (ATA) said the Belgian Government had made the “right decision” in dropping the tax proposal, which he believed had been “fashioned” as an environmental measure but that none of the funds collected would have gone to environmental projects.
“It would have been an enormous mistake to invoke this tax scheme on airline passengers,” he maintained. “The taxes ultimately would have interfered with investment in more fuel-efficient and greenhouse gas-efficient technologies.”
Meanwhile, Dr Peter Liese, German MEP and the rapporteur responsible for steering the directive including aviation into the EU’s Emissions Trading Scheme through the European Parliament, has criticized as “not helpful at all” recent statements by officials from the UK and the Netherlands that they will not earmark revenues for environmental and climate change measures raised from the aviation industry through the auctioning of emissions allowances.
“If any third country decides to attack the EU scheme at ICAO level, they must direct any legal complaint to the Member States because the European Union formally is not a member of ICAO and the obligation is with the individual States,” Dr Liese told GreenAir Online. “If a third country was of the opinion that without earmarking, the scheme should be attacked, they could address especially those Member States that have denied earmarking.
“That is why the UK and the Netherlands would be well advised to spend the appropriate amount of money on climate change mitigation.”
Dr Liese remarked that he had pushed hard for full legally-binding earmarking. “Unfortunately, the Council of Ministers was not ready to accept this,” he said. “Some Member States raised constitutional questions concerning the ability of the European Union to govern national budgets. Even so, what we agreed is the most far-reaching wording the Council has ever accepted on any kind of legislation.”
The final draft of the directive says revenues “should” be used for environmental measures.