Posted on: 10 July 2019 by Glenn Sands
On Tuesday France added its name to a growing list of European countries that impose an environmental tax on airline tickets. It’s a decision that the Air France stated will increase costs by at least US$67.3 million per year. “This new tax would greatly penalise Air France’s competitiveness, at a time when the company needs to strengthen its investment to more rapidly reduce its environmental footprint, notably as part of its fleet renewal policy,” said a senior representative from the airline.
The Air France group which is composed of the airline and its regional subsidiary HOP! Air France and Transavia has already agreed to reduce its CO2 emissions by 50% by 2050, in accordance with the Paris climate agreement objective.
Despite this, France’s transport minister Elisabeth Borne has backed the introduction of the eco-levy because there is a “feeling of injustice among our citizens regarding the taxation of airline transport.” France, she explained, committed to an EU-wide taxation on air transport “but there is urgency. Also, we have decided like other countries to introduce a progressive eco-contribution.”
During a meeting in May of EU transport ministers, Borne proposed imposing a tax on kerosene to reduce air transport’s impact on the environment.
The new eco-aviation tax will raise €182 million annually and proceeds will go towards investment on infrastructure for more environmental modes of transport. One suggestion is the railway network.
The statement was greeted with disbelief by Air France who stated that the funds should go towards supporting sustainable biofuel industries and new developments within the air transport sector.
The new eco-tax costs range from €1.5 intra-EU which includes domestic flights, to €3 for non-EU flights in economy class to €9 on intra-EU business-class ticket and €18 on international business-class flights.
It will be next year when the new levy comes into forces, and it will apply to all airlines flying out of France. It will impact Air France heavily because 50% of all its flight operate out of the country. The new tariff will be particularly damaging to its domestic network, which is already suffering losses to the rail network. A small number of French members of parliament proposed to an outright ban on domestic air travel no distance that could be covered by rail, but this suggestion was soon dropped.