German Government Plans Massive Air Tax Cut by Mid-Year

German Government Plans Massive Air Tax Cut by Mid-Year

The German federal government plans to lower the air‑traffic tax to the level it was in May 2024. According to a draft from the Federal Ministry of Finance covered by the FAZ, the reduction will take effect on 1 July 2026. The move fulfills a promise in the coalition agreement between the CDU, CSU and SPD that was agreed to by the parliamentary leaders at the end of last year, though the specific details were debated until now.

“New rates per passenger”
| Distance | Old rate (€/passenger) | New rate (€/passenger) | Savings per passenger |
|———|————————|————————|————————|
| Short‑haul / domestic | 15.53 | 13.03 | 2.50 |
| Medium‑haul | 39.34 | 33.01 | 6.33 |
| Long‑haul | 70.83 | 59.43 | 11.40 |

The tax that can be passed to passengers is one component of the overall state cost at German airports, alongside airport fees and charges. Whether ticket prices actually fall will depend on airlines like Lufthansa and others passing on the savings. At the same time, recent increases in government fees for security checks and air‑traffic control add to passenger costs, while oil prices-pushed up by the Iran conflict-continue to raise airline operating expenses.

The fiscal impact on the federal budget is significant: over the coming years the total cost will exceed €1 billion. In 2026 the Ministry of Finance estimates a revenue shortfall of about €185 million, with annual deficits of €340-355 million projected for 2027‑2030.

A key point of contention between the Union and the SPD was how to offset the reduced tax revenue. The draft now states that the shortfall will be fully covered by savings in the federal transport ministry’s budget (line 12 of the fiscal plan).

Transport Minister Patrick Schnieder (CDU) will be responsible for these cuts. Beginning in 2027, the ministry is expected to save roughly €350 million per year. The transport ministry is also a beneficiary of the €500 billion special fund for infrastructure and climate protection (SVIK), which may explain the timing of the decision. Nonetheless, the cuts could be painful for the ministry, as it delays a large backlog of road and rail investment projects.

The aviation industry is likely to welcome the draft. The German Aviation Industry Association (BDL) had previously warned that Germany risked losing its position as a hub. In 2025 European seat supply rose to 106 % of pre‑crisis levels, while Germany remained at about 89 %. Passenger numbers at German airports grew 3.6 % to 219.6 million, but the overall recovery remains sluggish.