IATA criticizes Germany’s ‘unhealthy obsession’ with aviation taxes

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The recent surge in aviation taxes in Germany has faced sharp criticism from the International Air Transport Association (IATA). According to the association, the tax will have a long-term detrimental effect on the German economy and hinder the industry’s efforts to decarbonize.

In line with a decision by the German government, as of May 1, 2024, aviation tax rates in the country surged by 19%, now varying between €15.53 and €70.83 per passenger, contingent upon the route. After the tax increase, IATA voiced concerns that Germany could become less competitive across several critical economic sectors, such as tourism, exports, and employment.

Given that international passenger numbers in the country remain 20% below pre-pandemic levels, placing it among the slowest in the European Union, the association warns that these measures will hinder the aviation sector’s recovery from the pandemic.

According to IATA’s Director General Willie Walsh, Germany’s government should focus on improving its competitiveness rather than opting for a short-term revenue boost.

“When Germany’s economic performance is anemic at best, denting its competitiveness with more taxes on aviation is policy madness. The government should be prioritizing measures to improve Germany’s competitive position and encouraging trade and travel. Instead, they have gone for a short-term cash-grab which can only damage the economy’s long-term growth,” Walsh said.

IATA also cautioned that although aviation aims to achieve net-zero carbon emissions by 2050, the tax increase will have a detrimental impact on decarbonization efforts.

“The German government coalition agreement originally stated that revenues from aviation taxes would directly fund production of SAF, but this commitment has been broken. In addition, weakening the German air transport industry with this tax makes it harder for airlines to invest in SAF, in a more fuel-efficient fleet and other decarbonization efforts,” IATA statement reads.