Hofmann's recommendations

Lower taxes, more passengers

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The association "Airlines for Europe" (A4E), which campaigns for a reduction in aviation taxes in eight European countries, among others, recently presented a study by Pricewaterhouse Coopers (PwC).

This illustrated once again that passengers in the UK, France, Spain, Italy, Norway, Sweden, Germany and Austria paid six billion euros in aviation taxes in 2017. "The largest share of these taxes is 3.6 million euros in the UK," A4E Managing Director Thomas Reynaert explained to Connoisseur Circle in Vienna.

The PwC study found that abolishing the Austrian aviation tax would increase gross domestic product by 320 million euros per year and create 1,000 new jobs by 2030. Lower fares would also boost tourism and drive growth. "The situation in Austria looks pretty good," said Reynaert. However, the aim is to completely abolish the Austrian flight tax, which was halved on January 1, 2018 to 3.50 euros for short-haul flights, from 7.50 euros for medium-haul flights and from 17.50 euros for long-haul flights.

In 2017, Austrian Airlines paid 40 million euros in flight tax to Austria, while the entire Lufthansa Group, including Austrian, paid 60 million euros. "Perhaps this amount will now be reduced by 50% in 2018; however, the tax should be completely abolished," explains its CEO Kay Kratky, adding that Austrian's passenger growth of 13% in the first quarter of 2018 is based on several factors, but the tax reduction also has a positive impact. "It confirms a scenario that we have also found elsewhere," says Kratky. For example, when Ireland abolished its aviation tax in 2014, the number of passengers rose from 23 million in 2012 to 32 million in 2016.

For Vienna Airport CEO Julian Jäger, the tax reduction is an important element in attracting more low-cost airlines to Vienna. "If an airline pays 7 euros (air traffic tax, note) and the average ticket price is less than 100 euros, this will be very relevant. This tax will also develop into a trivial tax that does little good but a lot of harm. Especially when it comes to creating new jobs. Conclusion: Every euro of this tax that is paid hinders the growth of airlines, but creates a major burden.