Germany’s air tax cut adds to the case against aviation taxes
The German government's decision to reduce its air travel tax back to 2024 levels has been widely welcomed by the aviation industry in Germany. The annual cost saving for airlines in Germany will be an estimated EUR350 million.
The government has changed its mind on this issue more than once. The latest decision is a win for a campaign led by airlines, including Lufthansa and Ryanair, and German aviation trade bodies.
It follows high profile recent examples of European nations abolishing air passenger taxes altogether, such as Sweden and Hungary. This suggests that acceptance of the case for lowering air passenger taxes is growing across Europe.
Lower taxes ease the burden on airlines, stimulating economic growth and helping aviation to invest in the green transition.
- The German government will reduce its air travel tax to 2024 levels from Jul-2026, saving airlines an estimated EUR350 million annually.
- This policy reversal follows intense lobbying by airlines such as Lufthansa and Ryanair, and aligns Germany with other European countries like Sweden and Hungary that have abolished or reduced air passenger taxes.
- High aviation taxes had led Lufthansa and Ryanair to cut capacity in Germany, contributing to the country's slow post-pandemic aviation recovery, with 2025 capacity projected at only 89% of 2019 levels.
- Additional cost-reduction measures include ending the national power-to-liquid fuel quota, reducing air traffic control charges, and lowering aviation security check costs.
- Industry leaders and trade bodies have welcomed the tax cut, but argue that further steps are needed to restore Germany’s aviation competitiveness and economic connectivity.
- Ryanair and other airlines are shifting capacity to countries with lower or no aviation taxes, highlighting the growing trend in Europe to reduce such levies to stimulate air travel and economic growth.