Icelandair opposes a proposed air passenger tax

Icelandair is opposing a proposed fee of 200 ISK per passenger, which the Minister of Infrastructure wants to impose to fund the development of alternative airports.

The fee is part of a bill for the development and operation of airports. The government claims that the fee would generate 1.5 to 2 billion ISK (10.0 to 13.3 million EUR) annually for the development of alternative airports, which are needed because smaller airports in Egilsstaðir and Akureyri cannot handle the traffic when Keflavík airport is closed.

Currently, airlines sometimes use airports in the UK and Norway as alternatives, which requires them to carry more fuel and increases emissions. Having safe alternative airports in Iceland would mean airlines could fly with less fuel.

The CEO of Icelandair, Bogi Nils Bogason, strongly opposes the fee. He argues that it would have a significant negative impact on Icelandair and other Icelandic air carriers, making them less competitive in the market for flights between Europe and North America. He points out that airlines flying directly across the ocean without stopping in Iceland would not have to pay the fee, while those offering flights to North America with a stopover in Keflavík would be subject to it. Bogi also mentions that Icelandair often uses smaller planes for connecting flights, which are generally more environmentally friendly than wide-body jets used for direct flights.

Bogi criticises the fact that tax revenues from aviation and tourism have increased significantly in the past decade, while investments in the alternative airport system have been neglected. He also expresses concerns about potential delays in the necessary development of Keflavík airport if resources are prioritised for other airports.

Bogi suggests that if the bill is approved, it should not come into effect immediately in June, as it would be challenging to collect the fee from tickets that have already been sold. Airlines sell their flights up to twelve months in advance, and they are currently facing considerable burdens. Additionally, he mentions that airlines have limited capacity to take on additional burdens at the moment.

Source: RUV