Airports Council International Europe advised the Danish Government on Wednesday, November 15, against introducing a passenger tax averaging 100 Danish krone or $14 (€13.41) on air travel, cautioning it could undermine decarbonisation, connectivity, and competitiveness in the aviation sector.
With only a portion of the new tax allocated to environmental initiatives in Danish aviation and the majority supporting the welfare system, the measure is expected to harm the competitiveness of Danish airports, hindering their ability to fund ambitious decarbonisation plans.
Notably, Aarhus, Billund, Copenhagen, and Roskilde airports are at the forefront of the industry’s decarbonisation efforts, collectively striving to attain net zero for CO2 emissions under their control by 2030.
This proposed tax is truly ill-advised and essentially amounts to political green washing more than anything else.
As per the government’s proposal, the passenger tax is set to be phased in gradually starting in 2025, with projected rates by 2030 reaching around $9 (€8.42) for intra-European travel, $34 (€31.83) for medium-distance flights, and $56 (€52.42) for long-distance flights.
Proceeds will be partially reinvested in the aviation industry for green aviation initiatives while also contributing to the support of elderly individuals in Denmark.
Jankovec emphasises that the proposed measure, far from assisting airports and aviation in their decarbonisation endeavours, will actually counterproductively redirect essential financial resources away from the sector.
To further make his point, Jankovec underscores that the EU has already put an ambitious regulatory framework through the Fit for 55 package to decarbonise its aviation sector by tightening its Emission Trading Scheme and mandates for deploying Sustainable Aviation Fuels.
Along with other measures, this will require additional investments from the whole aviation ecosystem to the tune of €820 billion by 2050. So clearly, new taxes are the very last thing we need. If anything, more financial support is what is required.
On the contrary, the Danish government anticipates the new tax to bring in 1.2 billion Danish krone (€160.89 million) in revenue. These funds will be directed toward funding their ambitious plan to exclusively use 100 per cent sustainable fuels for domestic flights by the year 2030.
However, Jankovec insists that the proposed tax not only poses a risk to Denmark’s economic connectivity but could also hinder its recovery from the impact of COVID-19, as the current air connectivity is still ten per cent below pre-pandemic levels.
Danish ministers acknowledge the disproportionate impact of the passenger tax on smaller regional airports, leading them to allocate 550 million Danish krone (€73.73 million) for targeted initiatives.
This financial support is intended to cover the development of sustainable aviation fuel infrastructure and sustain a programme to attract new international flights to these regional airports.
