Airline Ticket Taxes

Several countries have introduced airline ticket taxes. They are a hardly notable substitute for those taxes which are inherent in the system, namely VAT and Energy Tax.

A survey conducted by Transport & Environment shows that approximately 60% of the market for flights leaving EU countries are covered by airline ticket taxes.

Overview of Airline Ticket Taxes in the EU in 2011 (in EUR):

Short haul (roughly <3000 km) Medium haul (roughly 3000 - 6000 km) Long haul (roughly >6000 km) Market share
Eco Business Eco Business Eco Business
Austria 8* 8* 20** 20** 35 35 2%
France 1 10 4 40 4 40 13%
Germany 8 8 25 25 45 45 19%
Ireland 10 10 10 10 10 10 2%
UK 14 28 70 141 88 - 100 176 - 200 25%
Total 59%
*reduced to 7 Euro
**reduced to 15 Euro

The following example taken from Austria illustrates that Airline Ticket Taxes are a hardly notable substitute for Energy Tax. The calculation of the revenue shortfall in this example does not include the VAT shortfall due to the VAT exemption on all non-Austrian flights: 

In 2011 Energy Tax on fuel for road transport was applied at the rate of EUR 0,482 per litre. An equal taxation of aviation fuel would have generated EUR 416,8 million in taxes. In 2012 airline ticket taxes amounted to EUR 59,6 million. Thus, in 2012 Austria granted the aviation industry an Energy Tax benefit of EUR 357,2 million.  In 2013 this tax benefit will even be higher, since ticket taxes have been reduced. (Source of Information: Ă–sterreichischer Verkehrsclub - VCĂ– 2012).