- PwC study estimates an increase of 24.6 million passengers and an extra €1.6 billion tourism expenditure by 2020.
- €1 of abolished air passenger tax creates €1.08 in indirect taxes – Tax will raise €1 billion in 2017.
- Berlin: 4.6 million additional passengers and €300 million additional tourism spending by 2020.
A new study commissioned by A4E from PwC – “The economic impact of air taxes in Europe” – shows that abolishing the air passenger tax in Germany would boost German GDP by €67 billion (cumulative) over the next 12 years. It would grow from an additional €3.7 billion in 2018 to €6.9 billion per year by 2030. This would create 12,300 jobs in the two years following the taxes abolition with a total of 26,000 new jobs created by 2030.
“The study demonstrates the impact of passenger taxes, which hinder economic growth and tourism. Countries which have scrapped them have seen a boom in air traffic which has benefited their economies. German policymakers cannot just close their eyes to reality once they understand the maximum economic benefit which would be unlocked through the removal of these taxes,” said Thomas Reynaert, A4E’s Managing Director.
“The aviation tax weakens the competitiveness of German airlines and airports and harms the entire German business location. With the upcoming government formation at the federal level, there is the chance that a future coalition government finally agrees on the reduction of this special burden. This would increase the competitiveness of our companies and increase the innovative capacity for low-emission fleets and even better service,” said Matthias von Randow, BDL’s Executive Director. The report by PwC estimates that total air passenger taxes will raise €1 billion in Germany in 2017. According to the report, removing aviation taxes in Germany would boost economic activity and generate an even higher revenue of 108% in indirect taxes. This means the government could expect a net 8% increase in tax income as a result of abolishing the tax.
“Today, we have good news for the Germany economy and tourism which will be benefitted from the abolition of aviation taxes. Removing all air passenger levies would add more than 24.6 million passengers by 2020, with more than half being tourists. To make Germany more attractive, accessible and welcoming to visitors these taxes must be eliminated,” added Reynaert.
The report estimates that passengers arriving in Germany would increase tourism expenditure by around €1.58 billion by 2020. Approximately 79% of the additional passengers would come to Germany for leisure purposes versus 21% for business purposes
“Looking into the potential for the capital Berlin the study reveals an impressive increase of 4.6 million passengers by 2020 associated with an additional tourism spending of €300 million. During these challenging times of change within the German aviation sector, Berlin could gain thousands of new jobs, even beyond aviation,” added Reynaert.
Other sectors of the German economy would also benefit from lower airfares with the abolition of these taxes. Typically, the sectors which benefit most are those which are the biggest users of air transport such as manufacturing and financial services.
Currently, air passenger taxes are collected in Austria, Croatia, France, Germany, Greece, Italy, Latvia, Luxembourg, Norway and the UK, with Germany being the second largest collector.