News

Austria set to introduce “eco” tax

2 Nov 2010 by BusinessTraveller

It seems that Austria is likely to follow its neighbour Germany (see online news September 3) and introduce a departure tax in the near future. The exact date has yet to be announced but it could be as early next year.

It means that passengers departing from an airport in Austria will have to pay an “eco” tax of €8 for short-haul and €40 for long-haul flights.

So the UK business person travelling on a round-trip ticket from London to Vienna will have to pay an additional €8. But as in the case of Germany it is expected that the new tax will not be payable by transit passengers.

This is important because the business model of home carrier Austrian Airlines is geared around flying passengers between destinations in Western Europe on the one hand and Central, Eastern Europe and Russia on the other via its Vienna hub.

As might be expected, the European airlines’ trade body AEA is highly critical of this development and believes its sole purpose is to plug a budget deficit rather than reduce carbon emissions.

“If the intention is to boost fiscal revenues, I fear the Austrian government may find it has got its sums wrong,” said AEA secretary general Ulrich Schulte-Strathaus. “They should learn the lesson of the Netherlands, which abandoned its own passenger tax in 2009 after just 12 months, when it was discovered it had cost the economy a billion euros in return for just Euros 300 million in revenues.”

In the Dutch case, many travellers chose to board their flights in nearby countries with Dusseldorf and Brussels being popular. Amsterdam airport told Business Traveller that 1.3 million passengers were lost – see Hub of Holland in our November 2010 issue.

But this is more difficult in the case of Austria. Granted travellers based near the Swiss border might opt for Zurich and those near Vienna might consider nearby Bratislava in Slovakia.

But there is a limited range of short-haul flights from Bratislava. Most are with Ryanair rather than big national carriers like Air France, British Airways or Lufthansa. It means that interlining facilities at another European hub are not possible (Ryanair does not offer facilities for through-checking). Bratislava has no long distance flights at all.

However, if the airlines see more demand at Bratislava extra services may appear.

Report by Alex McWhirter

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