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Court Signals It Will Uphold German Air Travel Tax

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Germany's constitutional court on Tuesday indicated the country's EUR€1 billion per year air travel tax would likely withstand a legal challenge brought by a regional state.

The German state of Rhineland-Palatinate, which owns the majority of loss-making regional airport Hahn, one hour's drive from Germany's main hub Frankfurt, had applied for a judicial review of the tax.

After the levy was introduced in 2011, no-frills carrier Ryanair, which operates from small regional airports such as Hahn, cut the number of flights from Germany.

A ruling is not expected for a few months but judge Michael Eichberger said in a court hearing that German lawmakers had acted "very craftily but also skillfully" when drafting the law.

The state of Rhineland-Palatinate has argued the tax would hurt airports in border regions in particular as passengers switch to cheaper flights from foreign airports.

The court said that posing a burden on airports was not enough to declare a tax unconstitutional and that the federal government's motives would have to be acknowledged.

Berlin introduced the levy in 2011 as a green tax aimed at discouraging people from flying and to boost tax receivables. It gets around EUR€1 billion (USD$1.37 billion) from the fee each year, with about a third coming from Lufthansa.

Airlines must pay the tax for each aircraft taking off from a German runway. The levy ranges from €7.50 (USD$10.29) per passenger for short trips to €42.18 for long-haul flights.

Ireland scrapped its air tax of €3 per passenger and flight in April to help the tourism industry.

The Netherlands abandoned a similar tax in 2009. Britain and France also have air travel taxes.

(Reuters)

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