Airline ticket tax could triple and bring in 1 billion euros more by 2025
The tax on airline tickets could triple and bring in 1billion euros more by 2025
October 2 (Les Echos) -- Air transport will not escape a new tax tightening. According to our information, the Ministry of Economy and Finance plans to collect an additional 1 billion euros from this sector, by significantly increasing the so-called solidarity tax (TSBA) on airline tickets, in the 2025 finance bill.
This solidarity tax has been subject to multiple increases and diversions since its creation in 2006 by Jacques Chirac to finance the fight against AIDS in Africa. In 2019, the Borne government added an "eco-contribution" to finance the renovation of the rail network. This is one of the ten taxes and charges weighing on air transport in France, and whose total amount represents up to 40% of the price of a
ticket.
But the planned increase in the TSBA would be equivalent to almost tripling the product of this tax, currently 460 million euros per year. With a special effort required of "high contribution" customers and distant destinations.
According to the different versions of the project, which all aim to achieve this objective of an additional billion euros,
the amount of the TSBA could thus increase from 63.07 euros for a long-haul flight in business class, to 200 euros for a flight of more than 5,000 km and 100 euros for a journey of 5,000 km and 1,000 km. In "economy" class, the tax would increase from 7.51 euros for a long-haul flight, to 60 euros for a flight of more than 5,000 km and 42 euros for a flight of more than 5,000 to 1,000 km.
As for intra-European flights of less than 1,000 km, as well as those to the French overseas departments, their fate has not yet been decided.
Initially, the government planned to spare them a further increase in the TSBA, knowing that taxes and fees already represent 40% of the price of a domestic flight, compared to 17% for a Paris-New York flight. But it was considering doubling the VAT on domestic flights, which would have increased from 10% to 20%. According to the latest news, it has finally decided not to touch the VAT. But an increase in the tax on intra-European flights is under consideration, with the idea of hitting low-cost airlines.
A new version of the TSBA is also planned for business aviation. According to our information, it could reach 3,000 euros per passenger for a long-haul flight in a private jet (and 1,500 euros for the same journey of more than 5,000 km in a turboprop plane with a propeller, even if this does not exist).
It will be added to the increase in fuel taxes decided in 2023.
Enough to please the left and environmentalists, for whom
business aviation has become one of the favorite targets. The previous government had already prepared the ground in the spring, with a study by the General Secretariat for Ecological Planning (SGPE) that recommended aligning the taxation of long-haul flights with that of medium-haul flights, in the name of combating CO2 emissions. This increase in taxation will further aggravate the competitiveness deficit of French air transport. A deficit that has already resulted, over the last twenty years, in the loss of one point of market share per year of the French flag in France, which fell to 38%. Because if the TSBA applies to all flights departing from France, it penalizes French companies more, first and foremost Air France. A spokesperson for the company points out that the Air France group is "the largest contributor to this tax, with more than
140 million euros collected in 2023 for Air France and
Transavia", or more than 30% of the total. "The project under study,
which represents a non-progressive doubling of the TSBA's revenue, is unprecedented. Its financial weight could not be borne
by airlines alone and would necessarily lead to an increase in the price of plane tickets,"
Air France emphasizes.
The more the taxation of flights departing from France increases,
the greater the risk of seeing a growing number of
passengers take their long-haul flight abroad. Which,
from a CO2 emissions point of view, is possibly
worse. In addition to the risk of traffic being diverted to other major hubs, there is the risk of France becoming less attractive to international tourists. Rather than entering Europe via Paris, tourists may find it more advantageous to arrive via other capitals. The increase in the TSBA is all the more worrying as it would be added to other increases in various costs in 2025. "France is one of the European countries where air transport is the most heavily taxed," Air France points out. In 2023, the taxes and duties paid and collected by Air France-KLM reached 3 billion. »
However, this amount will increase further in 2025, with the tax
on major airports, but also the possible increase in
tax on corporate profits with more than 1 billion euros in turnover, which would increase from 25% to 33.5%. Other charges specific to air transport are also planned for next year, such as the increase in civil aviation fees to finance the reform of air traffic control and the end of free emissions permits, the cost of which for Air France will increase from 100 million euros in 2023 to 300 million by 2030. Not to mention the additional billion euros represented by the objective of 10% sustainable aviation fuels by 2030.