On Tuesday, France’s Transport Minister Elisabeth Borne announced that the French government will be introducing a new tax next year on all airlines departing from its airports. (Reuters and AP). The tax will expectedly raise 180 million euros in its first year (Euro News) from a minimum tax of 1.5 euro on domestic and EU flights to 18 euros maximum on business-class tickets out of the EU (Reuters). Nonetheless, it will not apply to domestic flights to Corsica and the French territories overseas as well as connecting flights and those arriving in France’s airports (AP). This move comes after the French government had not followed through with its planned and later much-protested taxes on Diesel and Gasoline, pursuing new routes to raise funds (Bloomberg).
According to Borne, the proceeds from the eco-tax will help finance and support state coffers and daily transportation systems, particularly local trains (Reuters & Bloomberg). Following the announcement, the shares of European airlines declined, with Air France registering a 5.2% decrease (Reuters). The spokesperson of the International Air and Transport Association (IATA) pointed to the potential economic harms the new tax would bring about without fostering any sustainability efforts (AP). Air France., on its part, confirmed this notion, claiming that the tax would generate massive extra costs and reduce the company’s competitiveness (Bloomberg).
Tags: France, eco-tax, airlines, flights