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Business

German air passenger tax under increased fire

In response to German carrier Air Berlin filing for bankruptcy, German Economy Minister Brigitte Zypries has demanded that the country's air passenger duty be scrapped as soon as possible. Here's why.

German Economy Minister Brigitte Zypries told the Monday edition of the German business daily Handelsblatt that she was in favor of abolishing the nation's air passenger tax.

She said the excise duty had long been criticized by both airlines and trade unions as an instrument giving domestic carriers, airports and passengers a bad deal.

"The abolition of the tax could make our airlines a lot more competitive vis-à-vis our European neighbors," Zypries argued.

German Transport Minister Alexander Dobrindt had demanded as early as May this year that the duty be scrapped, calling on lawmakers to prepare an exit.

Different views

Germany introduced the air passenger tax back in 2011. It has since applied to departures from German airports and has been hailed by environmental pressure groups such as BUND as "one of the few measures for more climate protection in the transport industry."

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The mark-up on ticket prices, making a difference of between 7.50 euros ($8.8) for short-haul journeys and over 40 euros for long-haul flights per ticket, has helped to shore up the federal budget, contributing almost 1 billion euros a year, according to the Bild daily.

But more and more lawmakers have come to believe that the excise tax is costing the country more money than it brings in as many passengers are put off flying from airports in Germany because of higher travel costs.

In her interview with the Handelsblatt, the German economy minister also warned of a spiral of subsidies in the aviation industry. But the government in Berlin, she added, needed to create the conditions for domestic airlines to compete successfully with foreign carriers.

hg/tr (Reuters, AFP)

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