Daily Management Review

France announces new tax for air fares


07/10/2019


The Minister of Transport of France, Élisabeth Borne, announced her intention to introduce an environmental tax on all flights of aircraft departing from France starting from 2020.



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Borne told about this at a press conference on Tuesday, July 9. The amount of tax that will be included in the price of air tickets for flights from France will vary depending on the class and distance of flights. The sum will range from €1.5 to 9 for economy and business class tickets for flights within France and the European Union, and from €3 to 18 for flights outside the EU.

According to a French official, the new tax will allow the authorities to attract about €180 million (~ $ 202 million). These funds will be reinvested in improving the infrastructure of France, in particular, the bulk of the funds received from the tax, Borne said, will be directed to investment in railway infrastructure of France.

News on the introduction of an environmental tax on flights from France resulted in a decrease in the quotes of a number of leading European airlines: Air France shares finished Tuesday trading with a fall of 3%, Lufthansa dipped by 2%, and Ryanair fell by 4.8%.

Air France opposed the announced measures, declaring “sharp disapproval” of the proposal of the French authorities. According to forecasts by Air France, the new tax will reduce the company's competitiveness and increase its costs by €60 million per year.

The Minister’s commentary was one of the main reasons why the environmental fee "is even more incomprehensible", as stated by Air France. According to her, the French authorities intend to finance modes of transport competing with air transport, and not improving the environmental situation in the airline industry itself.

source: bbc.com






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