German 'Environmental' Travel Tax defies logic, says Airlines

The tax is supposed to help the environment by discouraging people from flying, said AEA Secretary General Ulrich Schulte-Strathaus, while at the same time pouring a billion Euros into the treasury. But if a passenger flies and pays the tax, he is impacting the environment. If he doesnt fly, the treasury doesnt get his money. A classic example of doublethink. But it was more convoluted than that, he said. Much of the emergency funding requirement was arising from the support given to some southern European economies - the very economies which relied heavily on inbound tourists for whom the tax would be a disincentive to travel, or would at least reduce their disposable funds at their destination. Environmental air passenger taxes have a habit of leading to unintended consequences, said Mr Schulte-Strathaus. The Dutch recognised this, to their cost, when they introduced such a tax in 2008, only to withdraw it a year later after it had caused significant damage to their economy while delivering nothing for the environment. Germany is the worlds second-largest exporting nation, and exports account for half the national GDP. The same government that is proposing the tax, just months ago, was highlighting the contribution of the airline sector to its own economic recovery programme. The tax will hit customers for German products, visiting their suppliers and salesmen for German companies, visiting their customers, said the Secretary General. Anything which makes travel more expensive, makes trade more expensive, and so holds up economic recovery. National economists will soon be seeing in their quarterly figures what happens to the countrys accounts when air transport is interrupted, as it was during the Icelandic volcano eruption. But the greatest losers would be ordinary German citizens, hit hard in the pocket. The airline industry has a solid programme of environmental action on a global scale, which will be distorted and weakened by uncoordinated activity at a national or regional level. The general public, whether travelling on business or for pleasure, should not be held hostage to short-term, ill-thought out taxation policies.