Airlines for Europe condemns new Norwegian air tax

Airlines for Europe condemns new Norwegian air tax

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A new air passenger tax to be imposed by Norwegian authorities has been strongly condemned by Airlines for Europe (A4E). 

Norway’s planned Air Passenger Tax equivalent to NOK 80 (€8.5) is due to be put in place this summer on departing passengers for both domestic and international flights.

Iata estimates the tax risks reducing the overall demand for air transport by 5%, which equals roughly 1.2 million passengers a year.

In addition, the tax would lead to a reduction in the direct and indirect output of the aviation sector by an estimated NOK 1.4 billion (€150 million).

The Italian government increased taxes on passengers charged at Italian airports by €2.50 earlier this year.

Some A4E member airlines have already taken action and positioned their aircraft at airports outside of Italy, damaging the Italian economy and putting the tourism sector at risk.

The A4E lobby group has addressed the issue of new and rising aviation taxes in Europe as one of its key policy priorities since being founded in January.

Managing director Thomas Reynaert said: “We are astonished about the unwavering approach of the Norwegian authorities on implementing the Air Passenger Tax while almost all comments during the public consultation period contained objections to it.

“Instead of preventing economic growth and job creation by imposing unreasonable taxes, European governments should create a supportive regulatory environment.

“Unavoidably, the proposed tax will lead to fewer operators in the Norwegian aviation market and reduced competition. If already the Norwegian competition authority states that airports may have to consider ceasing their operations due to reduced traffic the government deliberately wants to stifle the travel sector.”

The Dutch government’s removal of its ticket tax in 2009 led to strong growth in passengers; the Irish government’s removal of traffic tax in April 2014 led to extensive traffic growth at Irish airports and an 8% increase in tourism last year while the number of Northern Ireland residents flying from Dublin increased by 52% in the first year.

Economic analysis by PwC shows removing UK Air Passenger Duty would boost British GDP by 1.7% and create 60,000 new jobs by 2020.

Scotland plans to cut APD by 50% as a precursor to abolishing the tax entirely.

The tax is said to cost Scotland €90 billion in lost tourism expenditure until 2020.  Slashing APD will add €1.3 billion to the Scottish economy and create 4,000 jobs, according to studies from Edinburgh airport.

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