German Business Council Demands End to Aviation Tax

German Business Council Demands End to Aviation Tax

The CDU’s Economics Council has demanded the complete abolition of the aviation tax. Through the Funke Media Group newspapers, the group stated that measures beyond simply lowering the levy are necessary to make Germany an attractive location for air transport.

General Secretary Wolfgang Steiger argued that merely reducing the aviation tax is insufficient to eliminate existing competitive disadvantages. Instead, he believes a comprehensive abolition is warranted, paired with cuts to airport fees and charges. Furthermore, eliminating the tax would also benefit consumers. He suggested that strengthening Germany’s aviation location would create potential for higher tax revenues if airlines and jobs could return.

Steiger also criticized the proposed method of financing the cuts, expressing concern over plans that involve reductions to the transport budget, particularly in the investment sector. He argued that the funding should instead come from cutting consumer spending.

He noted that the general development of the aviation sector requires catching up. Steiger pointed out that while the industry in Germany has only grown by 1.7 percent over the past ten years, similar growth rates were recorded in France (30 percent) and Poland (122 percent). He attributed the decline to high state-induced costs, which have caused airlines to bypass Germany. Consequently, the country is increasingly losing its competitive edge, mirroring trends in many other economic sectors. While acknowledging that aviation will continue to grow overall, Steiger stressed that the critical question is whether German airports and airlines will be integral to that growth, or if they will no longer be necessary.

For context, the CDU and SPD had originally agreed in the coalition agreement to undo the tax increase implemented by the previous government. According to a proposed amendment to the Aviation Tax Law, this would result in the levy paid by airlines decreasing to the level they were at before May 2024, effective July 1, 2026. A corresponding vote is currently scheduled to take place in the Bundestag on Thursday. Recently, numerous airlines have cut flights involving Germany due to high location costs, including major carriers like Easyjet, Ryanair, and Lufthansa, which have reduced their route networks.