Lobby group Airlines4Europe (A4E) has called on European governments to address the issue of rising aviation taxes.
The group, which was set up in 2015 and comprises of major European carriers such as Air France, Ryanair and Lufthansa, has outlined the issue as one of its main policy priorities.
A4E said instead of preventing economic growth and job creation by “imposing unreasonable taxes”, European governments should create a supportive regulatory environment.
“By weakening an enabler of economic activity, governments are shooting themselves in the foot,” said A4E managing director Thomas Reynaert.
“They only see the short term budgetary gains but ignore the larger and long-term impact on economic activity.
“By removing passenger taxes governments would end up as net beneficiaries due to the increased revenues from VAT and other taxes, as well as higher passenger numbers,” he added.
The lobby group claim that removing aviation taxes is beneficial to the economy. It cites the Dutch government’s removal of its ticket tax in 2009 which led to strong growth in passengers; the Irish government’s removal of traffic tax in April 2014 which it said led to extensive traffic growth at Irish airports and an 8 per cent increase in tourism last year while the number of Northern Ireland residents flying from Dublin increased by 52 per cent in the first year; economic analysis by PwC shows removing UK Air Passenger Duty (APD) would boost British GDP by 1.7 per cent and create 60,000 new jobs by 2020.
Norwegian CEO Bjorn Kjos said: “We encourage European legislators to learn from prior experiences. The Dutch government abolished its aviation tax after just one year. It recognised the detrimental effect its tax was having on the wider economy as travellers bypassed Dutch airports and airlines in favour of cheaper options across the border in Germany or Belgium.”
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