Summary
- French government plans to raise taxes on airline tickets, with the collected funds being allocated to develop the railway sector.
- The tax increase will apply to first class and business class tickets, which are the highest-priced options for passengers and most profitable for airlines.
- The airline industry has concerns about the tax hike potentially undercutting competitiveness.
The French government intends to raise taxes on airline tickets and allocate the collected funds to develop its railway sector, as outlined in a report by Forbes. This decision arises from France’s aim to promote train travel over air travel in order to meet its environmental goals.
The newly introduced tax increase, which would be included in the next finance bill in 2024, would bring in around €100 million ($110 million) to the railway sector over the period between 2023 and 2027.
Raising taxes on high-end airfare
Notably, the newly introduced tax will be applied to first class and business class tickets, which are the highest-priced options for passengers and also the most lucrative for airlines. The French transport minister Clément Beaune told Le Parisien that people who pay more for travel are usually those that are less sensitive to price increases.
On the other hand, the French aviation industry expresses concerns that this tax hike could potentially undermine the competitiveness of the sector, given that it is already channeling substantial investments into environmental initiatives.
Photo: Lukas Wunderlich/Shutterstock
In addition, the airline industry is advocating for the newly imposed tax to contribute towards the advancement of the aviation sector, according to Le Parisien.
France has previously implemented increases in taxes on airline tickets, with the initial introduction of this measure dating back to 2005 and a subsequent increase occurring in 2020.
Ban of short-haul flights
France has been in the spotlight after introducing a ban on short-haul domestic flights lasting less than 150 minutes (or 2,5 hours) where a suitable alternative rail service exists. The ban effectively ruled out passenger air travel between Paris and the French cities of Nantes, Lyon, and Bordeaux. However, connecting flights have not been affected by the new laws.
As an added measure under the new regulations, France has also tightened rules on the use of private jets for short trips to promote sustainability and equitable transportation options for the general public.
Photo: Chandra Ramsurrun/Shutterstock
The newly implemented law specified that train services along the same routes should be sufficiently frequent, punctual, and effectively interconnected to cater to the requirements of passengers who might have chosen air travel. Furthermore, these alternative railway services should be capable of accommodating the additional volume of passengers who have shifted from domestic flights on the affected routes.
The recent Greenpeace report reveals that, on average, train travel in Europe costs four times more than air travel. The study examined over 100 routes connecting major European cities and found that while trains were generally twice as costly as flights, the difference increased to fourfold for routes involving travel to and from the UK.
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Sources: Forbes, Le Parisien, Greenpeace