News

Collective Madness
Travellers to Help Bail Out Bankers with New Departure Taxes

Geneva - The International Air Transport Association (IATA) criticised budget plans in Belgium and Ireland that mimic British and Dutch departure taxes as “collective madness.”

“Collective madness is the only way to describe the EUR 150 million Irish and EUR 132 million Belgian departure tax proposals. Filling budget gaps or financing government investment in the banking industry with gratuitous travel taxes is policy myopia at its worst,” said Giovanni Bisignani, IATA’s Director General and CEO.

On Tuesday, the Belgian and Irish governments announced plans to implement departure taxes in their new budgets. Combined with the proposed UK Aviation Duty and the recently implemented Dutch departure tax, by 2010 air travellers could face a tax burden of up to EUR 3.8 billion annually in these four counties alone.

“The timing could not be worse for governments to make mobility more expensive. Look at what has happened in fuel, the biggest cost item for airlines. Even with the recent drop, today’s price is still over 300% more expensive than it was only a few years ago,” said Bisignani.

“Rather than collective action to squeeze taxpayers, Europe’s governments should be looking to improve European competitiveness. An effective Single European Sky would save 16 million tonnes of CO2 annually and improve the competitiveness of Europe’s skies by over EUR 5 billion,” said Bisignani.

- IATA -

Notes for Editors:

• The Irish government announced plans to raise EUR 150 million annually with a tax to be applied to all passengers departing Irish airports commencing 30 March 2009.
• The Belgian Finance Ministry confirmed plans to raise EUR 132 million annually with a similar tax, the details of which are yet to be decided.
• Effective 1 July 2008, the Dutch Government began levying between EUR 11.25 and EUR45.00 on passengers departing Dutch airports to raise an estimated EUR 312 million annually.
• The UK Government doubled its Air Passenger Duty in 2007 to collect GBP 2 billion (EUR 2.5 billion) annually. From November 2009, the UK Government is proposing to replace this with an Aviation Duty that will collect GBP 2.5 billion (EUR 3.2 billion) annually rising to GBP 3.5 billion (EUR 4.4 billion) by 2011/2012.