France to tax flights from airports in bid to support the environment
Ryanair, Air France, easyJet and Lufthansa shares fall as airline levy is expected to raise about €180m from 2020
Paris — France will introduce a tax on airlines flying from its airports to help support the environment, transport minister Elisabeth Borne said on Tuesday, in a move expected to raise about €180m from 2020.
Shares in airlines across Europe fell on the news, with Air France down 5.2%, Ryanair shedding 4.8%, easyJet down 4% and Lufthansa dipping nearly 3% at midday.
However, activists said the new tax was unlikely to change consumer behaviour at the proposed levels and was low compared with other countries. Brussels-based non-governmental organisation Transport & Environment estimates airline taxes raise about €1bn a year in Germany and more than €3bn in Britain.
The new French tax will be €1.50 for flights within France or the EU, €3 for economy flights out of the EU, €9 for intra-EU business class and up to €18 for business-class tickets out of the EU. Transit flights will not be taxed.
“We have decided to put in place an eco-tax on all flights from France,” Borne told a news conference, adding proceeds would be used to finance daily transport in France, notably local trains.
The French government also said that from 2020 it expects to raise €140m from reducing tax benefits on diesel for trucks.
“The government is finally targeting tax breaks for the most polluting industries such as trucking and airlines, but these modest measures will not significantly reduce greenhouse gas emissions,” said Climate Action Network’s Lorelei Limousin.
Limousin said tax exemptions for jet-plane fuel cost French taxpayers more than €3.7bn a year.
But she welcomed the fact France was taking action at home, rather than waiting for an EU-wide initiative on airline tax.
France said in June it wanted the new European Commission to push for an end to global tax exemptions for jet fuel to reduce CO² emissions. It has also linked up with the Netherlands to try to convince fellow European nations to tax airline travel more.
Air France said the new tax would significantly hurt its competitiveness and represent an additional cost of over €60m a year.
It said 50% of its flights were operated out of France, notably for its domestic network, where losses amounted to more than €180m in 2018.
French President Emmanuel Macron’s government has said it wants to put the environment at the centre of its policies, but late in 2018 it abandoned an attempt to increase tax on diesel fuel following the “yellow vest” protest movement.
Andrew Murphy, air travel specialist at T&E, said the new policy was “a more equitable tax. Driving a car is often unavoidable, but frequent flyers tend to be wealthy urbanites”, he said.