Government Increases Aviation Taxes, Raising Ticket Prices in Germany

The aviation industry in Germany is facing significant challenges as the government prepares to impose additional taxes and fees, which are expected to further inflate ticket prices. According to the German Aviation Association (BDL), the current financial burden from taxes and fees already amounts to EUR3.3 billion, and an additional EUR1.2 billion is anticipated this year alone. This translates to an added cost of approximately EUR30 per ticket for travelers flying from German airports.

Jens Bischof, the president of BDL and CEO of Eurowings, has expressed concerns about the ongoing financial strain on airlines and airports, urging the future federal government to take action to lower operational costs. He advocates for the elimination of the increased air traffic tax implemented last year and the reconsideration of the planned national blending quota for sustainable aviation fuel, set to take effect in 2026.

As the aviation sector navigates through a recovering economy, the combination of rising air traffic taxes, increased air navigation fees as a consequence of COVID-19, elevated security check costs, and mandatory sustainable fuel usage is poised to add significant expenses to the industry. Bischof noted that these factors could lead to a total increase of EUR1.2 billion in costs this year alone.

The high taxation has been identified as a major factor contributing to the sluggish recovery of the aviation market in Germany, particularly in comparison to other European nations. The volume of domestic flights and direct connections, especially from low-cost carriers, has not rebounded as robustly in Germany following the pandemic as it has in many other European countries.

Last year, the overall air traffic capacity at German airports reached only 86% of pre-pandemic levels, while the rest of Europe achieved 104%. Projections for the upcoming summer season suggest a slight improvement, with estimates of 91% for Germany compared to 109% for the rest of Europe. Bischof emphasized that while Europe is experiencing unprecedented levels of air travel, Germany is lagging behind.

International airlines have shown reluctance to enter the German market, leading to a contraction of services among domestic carriers. For example, Lufthansa reported a 3.1% decline in passenger numbers at Frankfurt Airport, the largest in Germany, attributed to a reduction in flights offered by the airline.