Mapping out airport taxes around the world
Air passengers face an increasingly complex web of airport taxes around the world. A recent report by UHY Hacker Young found that the financial burden of such taxes stifles tourism, hampers economic competitiveness and puts regional airports at a considerable disadvantage.
So, which countries charge the highest flying fees, what governments have buckled under pressure to reduce or scrap them, and who has managed to steer clear of charging travellers departing from their airports?
The UK’s Air Passenger Duty (APD) is the highest passenger tax levied anywhere in the world. Originally introduced in 1994 as a means to pay for the environmental costs of air travel, it has risen by a whopping 824% by 2015.
What started out as £5 ($6.50) for short-haul flights and £10 ($12.97) for long-haul flights, the tax reached £13 ($17) for economy class and £26 ($33) for all other classes. Passengers flying further than 2,000 miles pay £73 ($95) for economy class and up to £146 ($189) for all other classes. A further rise is planned for April next year.
In a commissioned report, PwC argued that abolishing APD would give a 1.7% boost to the UK economy by 2020. In September, Prime Minister Theresa May came under renewed pressure from airline CEOs to scrap the tax.
Australia’s passenger movement charge (PMC) is one of the highest in the world. The flat rate of A$55 ($42) is imposed on all passengers leaving Australia via international flights or by sea. Introduced in 1995, the PMC replaced a previous departure tax and was initially sold as a way to offset customs and immigration screening costs for the government.
Last year, Australia ranked 127 out of 140 countries in terms of ticket taxes and airport charges in the World Economic Forum Travel and Tourism Competitiveness Report. The International Air Transport Association (IATA) argues that abolishing the charge would bring A$1.7bn ($1.2bn) worth of tourism to the country.
The most expensive taxes for a long-haul flight are from an airport in Russia, a study by UHY found last year. Passengers taking a long-haul trip pay as much as $272, while a short-haul economy class ticket includes an extra $52.
According to UHY chairman Ladislav Hornan: “Russia is planning a temporary reduction to taxes raised on domestic flights in order to ease pressure on an aviation industry that is currently suffering severely.”
Like some other Caribbean destinations, the Dominican Republic charges high taxes to fund its tourism industry. Passengers end up paying an airport infrastructure fee worth $33, an airport authority fee worth $30 and an airport departure tax worth $20.
Due to the tax structure, global advisors Value Penguin have stated that flying through two Dominican airports can double the airport authority fee.
Travelling to the Bahamas could set you back as much as $140 in taxes. The Caribbean destination charges passengers an airport facility fee of $34, a passenger departure tax of $29 and a security fee ranging from $3 to $13.
Germany’s air transport tax came into effect in January 2011 and charges different rates depending on the distance of the flight and destination. Short-haul departures are priced at €7.50 ($8.39) per passenger, while passengers are charged €23.43 ($26) for medium-haul services and €42.18 ($47) on long-haul flights.
According to BDL, Germany’s consortium of service providers, since the introduction of the tax the country has seen a drop in the number of passengers departing from its airports, and a boost in departures from airports just across the border in neighbouring countries.
In June this year, Norway introduced an air passenger tax for passengers on domestic and international flights, at a cost of €8.59 ($9.60).
The introduction of the tax met with strong opposition from Europe’s largest airline association, Airlines for Europe (A4E), which argued that it would reduce demand for air transport by 5% – the equivalent of almost 1.2 million passengers every year. Furthermore, IATA analysis stated that it would reduce the direct and indirect output of the Norwegian aviation sector by €150m ($167m).
Following the announcement, Ryanair – Europe’s most popular airline – confirmed that from October it would close its Oslo Rygge base and reduce its Norwegian traffic by 50%.
This summer, Qatar announced it would start levying a new tax on passengers from August. The decision was justified as a way to find new revenue streams amid falling oil prices.
Under the new regulations, every passenger – including those in transit – will be charged £7.10 ($9.20) for using airport facilities.
The Greek Government announced in August that from 2017, a fee imposed on passengers departing from 14 of its regional airports will increase from €12.7 ($14.20) to €13 (14.54).
The revenues from this fee, which targets airports operated by German company Fraport, will be invested in infrastructure as part of a €330 million ($368m) modernisation scheme.
The government also said that the fee could rise to €18 ($20) by the end of the project in 2020.
Earlier this year, the Italian Government increased its passenger tax by €2.50 ($2.80), a decision which IATA said was taken “without any advance warning or consultation”.
As a result, passengers departing from an airport near Rome must pay €10 ($11) in tax, while those flying from all other Italian airports pay €9 ($10). The revenue from the tax will not be re-invested in aviation, IATA added.
Jamaica’s departure tax was increased by 75% from $20 to $35 in June for all flights leaving the country. It is estimated that the tax will generate $5.5bn this financial year, the Jamaican Observer reported.
On top of the tax, each passenger is subjected to a landing fee of $20, officially named the Tourism Enhancement Fee.
A recent survey by the Caribbean Hotel and Tourism Association found that Jamaica has the highest taxes and fees on airline tickets in the region.
In 2012, the Spanish Government decided to tackle its budget deficit with the help of an aviation tax. As soon as an extra charge of €7 ($7.83) per ticket was announced, airlines had the choice of either absorbing the cost themselves, or passing it onto their passengers. Ryanair, for example, decided to do the latter.
The charge depends on what airport people use, with the tax per ticket almost doubling at certain larger airports.
In 2009, the Dutch Government was praised by industry bodies for scrapping its ticket tax, after some of its biggest airports recorded a steep decline in passenger numbers.
Dubbed “the eco tax”, it ranged from €11 ($12) to €45 ($50), and managed to raise around €380m.
However, it caused an 8% decline in passenger numbers at Schiphol Airport, which ended up costing the Dutch economy €1.3 billion ($1.7bn) in lost revenue.
At the time, the European Low Fares Airline Association (ELFAA) welcomed the “enlightened” removal of the tax. The initiative continues to be used as a leading example by those who are lobbying for the removal of similar aviation taxes in Scotland, Ireland and the UK.
Austria introduced additional flight charges in 2011, but in 2013 the fees were reduced from €8 (8.94) to €7 ($7.82) for short-haul routes, and from €20 ($22) to €15 ($16) for medium-haul routes. Fees for long-haul remained unchanged, at €35 ($39).
According to a survey conducted by Austrian Airlines at the time, 58% of Austrians supported abolishing the tax. A study by Oxford Economics also revealed the elimination of the tax could increase the number of passengers in Austria by 1.1 million, and bring €6.5m ($7.2m) in revenue to the economy.
In 2008, Belgium planned to introduce a tax on airplane tickets, but backed down a mere 24 days later, following strong opposition from the country’s aviation industry, airlines and regional airports.
The original plans aimed to impose a €10 ($11) for all flights, and up to €50 ($55) for intercontinental and business class trips. The move was advertised at the time as a way to raise €132m ($147m) for the economy.
Fiji has also been battling its aviation sector against a departure tax.
After initially increasing the fee from FJ$150 ($73) to FJ$200 ($97) in 2014, the government made a U-turn, lifting the tax for those who plan to stay in the country for less than 72 hours.
Ireland first introduced its air travel tax in 2008, and over the following five years, Ryanair reported a drop from 30 million passengers in 2008 to 23 million in 2012 across the country’s major airports. This happened despite the fact that the tax was fairly small in comparison with other European countries, at one point as low as €2 ($2.23) per flight.
In 2014, Ireland decided to abolish the tax. Within a year, the move led to “extensive traffic growth at Irish airports”, according to A4E, and an 8% increase in tourism. The number of Northern Ireland residents flying from Dublin also rose by 52%.
In September this year, Scotland announced a 50% slash of its air passenger duty, as it prepares to abolish it completely.
The reduction in ADP will add €1.3bn ($1.4bn) to the Scottish economy and create 4,000 jobs, Edinburgh Airport anticipates.