Skift Take

Chancellor Merkel's push for trains over planes is good news for the greening of travel — and will enrich government coffers in the process. Higher plane ticket prices, however, will have a great impact on low-cost carriers.

New climate protection surcharges on German air travel will begin in April, giving passengers a temporary reprieve before tickets become more expensive and providing airlines time to adjust pricing.

Lifting surcharges is an element of Chancellor Angela Merkel’s plan to nudge consumers to opt for trains instead of planes, above all in domestic travel. The increased fees are aimed at offsetting a cut in value-added tax on rail tickets that will take effect from January, ministry officials reported Monday at a press conference in Berlin.

German domestic air travel has stagnated for years, falling 0.8 percent to 23.5 million passengers in 2018 compared with the year before, according to the Federal Statistics Office. International flights from Germany are soaring, rising 5.5 percent last year to 99 million passengers.

How tax on air tickets will rise in Germany from 2020:

  • Domestic and Europe: 13.03 euros ($14.33) from 7.50 euros, a rise of 75 percent
  • Mid-haul: 33.01 euros from 23.43 euros
  • Long-haul: 59.43 euros from 42.18 euros
  • Tickets at dumping prices — meaning below-cost price — will be banned

How rail and tax receipts will benefit

  • Rail ticket value-added tax drops to 7 percent from 19 percent, reducing prices by about a tenth
  • More expensive air tickets will raise tax revenue by about 740 million euros, easily covering lost rail VAT

©2019 Bloomberg L.P.

This article was written by Brian Parkin from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

November 16, 2022
Dallas-Fort Worth, TX and Online
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Tags: climate change, germany, trains

Photo credit: A Condor aircraft at Frankfurt airport's Terminal 3. Low-cost carriers will feel the greatest impact on Germanys airline ticket tax, which takes effect in April 2020. Alex Kraus / Bloomberg