The True Costs of Aviation

Aviation is the most subsidised sector of industry. It does not operate on the basis of true cost.

1. Shortfall in taxes due to tax privileges of about € 50 billion a year

  • Shortfall in Energy Tax of about € 40 billion a year

If kerosene were taxed like petrol or diesel at an average rate of € 0,40 – € 0,48 per litre the consumption of 90 billion litres of kerosene would generate around € 40 billion a year. (The consumption of 90 billion litres of kerosene was assumed when calculating the cost of applying the EU Emissions Trading System in 2012.)

  • Shortfall in VAT of about € 10 billion a year

Transport & Environment estimate the revenue shortfall for member states at about € 10 billion. IATA claims Europe’s aviation market is worth about € 120 billion a year, approximately € 100 billion of which relates to passenger transport. Roughly half of the market for passenger transport is leisure and would normally be subject to VAT imposed on the end consumer. Assuming an average VAT rate of 20%, one arrives at an estimated € 10 billion subsidy.

Revenues from ticket taxes hardly change the picture. They are not levied in all countries of the EU and are generally of insignificant amounts.

It is unbelievable that the aviation industry enjoys such enormous tax privileges despite being the most environmentally detrimental mode of transport, accounting for some 5% of planetary global warming.

2. Direct EU-subsidies to Airports and Airlines of about € 3 billion a year

Under the current system airlines will continue to receive around € 3 billion a year in direct subsidies out of EU-funds. The EU-Guidelines on State Aid to Airports and Airlines are currently under consultation.

3. Health Costs

The calculations available of costs for medical treatment of diseases caused by the aviation industry produce alarming figures, e.g. according to the President of the German Federal Environmental Office (Deutsches Bundesumweltamt), the treatment of cardiovascular diseases alone caused by aircraft noise in the area of Frankfurt is estimated to cost approximately 400 million euros over the next ten years.

4. Loss in value of properties

People who happen to live below flight paths near an airport are not only forced to put their health at risk, they also have to bear the economic loss in value of their residential houses.