Air transport: Will flying become more expensive from May?

Passengers will have to prepare for higher ticket prices from May. The reason is an increase in the ticket tax that applies to all passengers taking off from German airports. The increase is part of the package of measures with which the federal government wants to plug billions in holes in the budget following a ruling by the Federal Constitutional Court. The cabinet initiated it, and the Bundestag is next in line.

Specifically, the ticket tax is set to rise by almost a fifth from May 1st. Depending on the flight distance, it is then 15.53 to 70.83 euros per passenger. The ticket tax affects all passengers taking off from German airports. The airlines have to pay the surcharges, but they can pass them on to the passengers.

The federal government expressly expects that flying will then become more expensive. In the draft for the so-called budget financing law, she writes: “The expected transfer of the tax to flight prices will have a direct impact on the individual prices for air travel. Particularly in the area of ​​so-called low-cost flights, the tax can make up a significant proportion of the total flight price.”

Trips departing from May 1st are now likely to become more expensive. Anyone who has already booked their ticket is probably safe, because demanding an increased tax afterwards would probably be legally difficult. It is uncertain whether the companies will pass on the higher taxes equally on all flight connections. The competitive pressure is particularly high on intra-European flights – higher than on intercontinental connections.

This year, around 400 million euros more in taxes are expected to flow into the state coffers as a result of the higher ticket tax. The government expects additional revenue of 580 million euros for the following years.

Industry criticizes increase

The Federal Association of the German Aviation Industry criticized the increase. President Jost Lammers said that the burden on air traffic in terms of state location costs in Germany is already by far the highest in Europe.

“Among other things, the massive increase in air traffic tax in 2020 meant that Germany as an aviation location lagged significantly behind in the recovery after the corona pandemic – while the other European countries are already back to pre-crisis levels.” The range of direct connections from Germany to other European countries is already significantly lower than at the airports in other European countries.

The planned further increase in air traffic tax now threatens further cuts, which not only endanger the connection to important business locations. The airlines would then have less energy to invest in the decarbonization of air traffic, warned Lammers.

“It is all the more important that the federal government fulfills its commitment from the coalition agreement to use the revenue from the aviation tax to offset the high additional costs of sustainable aviation fuels so that climate-neutral flying can make progress.”

No kerosene tax

The federal government initially examined the introduction of a national kerosene tax. Kerosene used in commercial aviation is exempt from energy tax. But because a kerosene tax would have placed a one-sided burden on national airlines, the traffic light coalition backed away from this idea. The Federal Association of the German Aviation Industry had criticized that a national kerosene tax going it alone would have made feeder traffic to German hubs more expensive and thus shifted traffic abroad.

The federal government wants to generate a further 45 million euros in revenue by revising the so-called reduction mechanism for ticket taxes. Previously, the tax rate was reduced if the federal government received a certain amount from the auction of emission allowances for aviation. This amount is now set higher so that the tax rate does not have to be reduced again and again when certificate prices rise, but rather the federal government has more left over.