Thursday, 22 August, 2019

France to tax flights from its airports, airline shares fall

Air France planes are parked on the tarmac at the Paris Charles de Gaulle airport in Roissy France to impose"eco-tax on all airlines for flights from France starting in 2020 Credit Philippe Wojazer Reuters
Patty Aguilar | 10 July, 2019, 14:42

Borne told a news conference that she expects the new tax will raise raise 180million euros (£160million) per year from when it is introduced.

Élisabeth Borne, France's Minister of Transport: France is committed to taxing air travel, which is important for Europe.

"This new tax would significantly penalize Air France's competitiveness, at a time where the company needs to strengthen its investment capacity to more rapidly reduce its environmental footprint, notably as part of its fleet renewal policy", the airline said. Under the tax, a business-class ticket for a flight bound out of the European Union would cost 18 euros more - about $20.

The new tax will cost passengers up to €18 ($US20.20) and will be levied on passengers flying from the popular tourist destination.

Under the plan, nearly all outbound flights from France will be taxed, with the size of tax differing depending on destinations or ticket types.

Air France said it "strongly disapproves" of the new tax.

The new tax may cost Australians up to $29 extra on their plane ticket.

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"We have chose to put in place an eco-tax on all flights from France", Borne said during a news conference, adding that the funds will finance daily transport in France.

The government said that the funds from tickets for flights originating in France would be used to create less-polluting transport options as concerns grow about carbon emissions from planes.

The International Air Transport Association was quick to condemn the move.

So-called ecotaxes have met with heavy criticism from the IATA.

Industry group IATA, which favours a system that allows airlines to offset their emissions by paying for carbon reduction efforts elsewhere, called the French ticket charge "misguided".

"This alone won't do much, but it's at least a recognition by the French government that more is required", said Andrew Murphy, an air travel expert at Brussels-based group Transport and Environment. Thus, the government of President Emmanuel Makron fulfills the promise to take measures to combat pollution and climate change.

French President Emmanuel Macron's government has said it wants to put the environment at the center of its policies, but late a year ago it abandoned an attempt to increase tax on diesel fuel following the "yellow vest" protest movement.

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