The German aviation industry is mounting pressure on the ruling coalition government to swiftly enact promised tax cuts for air travel, a commitment made in November and slated to take effect on July 1st. Michael Engel, CEO of the German Aviation Association (BDF), has publicly urged the government to prioritize the implementation, arguing that delays risk undermining its potential benefits.
Speaking to the “Rheinische Post”, Engel emphasized that a rapid rollout would be crucial to stimulating growth, expanding flight offerings within Germany and ultimately increasing tax revenues. He stated that the coalition’s agreement, including the mechanisms for offsetting the fiscal impact, now requires legislative action through an amendment to the Air Passenger Tax Act, a process he underscored as residing primarily within the purview of the Federal Ministry of Finance.
However, a significant hurdle remains as the Ministry of Transport and the Federal Ministry of Finance reportedly clash over the necessary financial compensation for the anticipated €350 million revenue shortfall. Transport Minister Patrick Schnieder of the CDU has indicated that his budgetary allocation offers no room for maneuvering, triggering concerns about the coalition’s ability to deliver on its promises.
The impasse has drawn criticism. Anja Karliczek, Chairwoman of the Tourism Committee in the Bundestag (German Parliament), has cautioned against prolonged disagreement, stating she expects the government to resolve the issue. The delay raises questions about the coalition’s commitment to supporting the aviation sector and potentially dampens its ability to remain competitive within the European market. Analysts suggest the issue highlights a broader tension between fiscal responsibility and industry support within the government and whether the promised tax relief will ultimately be delivered as planned.