BERLIN: A constitutional court in Germany has rejected the endeavour by the federal state of Rhineland Palatinate as it challenged the legality of the country’s air traffic tax. German airlines and airports said the tax was hurting their business.
The court has said that the tax is constitutional and does not contravene passengers’ or companies’ rights. This tax had been in place since 2011 and applied to all passenger flights leaving the German airports.
The tax brings the German government around EUR€1 billion (USD$1.25 billion) a year, with Lufthansa paying around EUR€350 million in 2013.
The lawsuit argued that airports in border regions were losing customers to rival airports in other countries such as the Netherlands, Belgium and Luxembourg, which do not levy similar charges.
German airlines say the tax burdens them unfairly and that it cannot be passed on to passengers because of tough competition on ticket prices. They have been lobbying fiercely to have the tax scrapped and some members of parliament have indicated they support the phasing out of the payment.
However, the finance ministry, aiming for a balanced budget this year, has repeatedly rejected the idea of changes to the tax.
Air Berlin, which paid EUR€143 million in air traffic tax last year, said it would continue to lobby for the tax to be abolished.
The government says the tax brings environmental benefits, but those campaigning against it say the funds have served only to swell the finance ministry’s coffers.
The BdL air industry association said by the end of 2014, German companies will have paid EUR€2 billion due to the tax, enough to buy 28 Airbus A320neo jets.
Ryanair, keen to expand in Europe’s largest economy, has also called for the charge to be dropped, urging Germany to follow the example of Ireland, which decided in April to abandon its own air travel tax.
“Axing travel tax is the only way to allow all German airports to become competitive once more,” a spokesman said.
The German tax sees flights of up to 2,500 km hit with a charge of €7.50, which rises to €23.43 for up to 6,000 km and then to €42.18 for flights of over 6,000 km.
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