This article has been saved to your Favorites!

EU Airlines Want Flight Taxes Suspended To Stem Losses

By Todd Buell · 2020-03-17 16:30:34 +0000

London - Groups representing European airlines on Tuesday asked for an array of aviation taxes to be temporarily suspended to help the industry recover from the economic impact of a coronavirus pandemic responsible for massive travel disruption worldwide.

Their letter, sent to European Union national transport ministers who are due to meet Wednesday, came as some airlines drastically cut down their operations following unprecedented travel restrictions that countries have imposed to stop the spread of the virus.

"We call for the deferment of [air traffic control] charges and aviation taxes at EU or national level to aid in the sector's future recovery," industry groups Aviation for Europe and the European Regions Airline Association said. "Any fiscal burdens should be postponed or suspended until the industry is back on a sound operational and financial footing." 

The letter detailed how some airlines have had to ground nearly all of their fleets and announce temporary job cuts. The sector directly employs 2.6 million workers and accounts for another 12.2 million indirectly, it said.

"It will take time, financial sacrifice and hard work for our airlines to recover from the damage caused by the COVID-19 outbreak," the groups said.

The EU said in September that the energy taxation directive, an EU-level law from 2003 that sets rules on how energy is taxed in the 27-country bloc, was no longer suitable and the bloc is in the process of revising it. The current directive exempts fuel for commercial aviation.

The EU's tax commissioner, Paolo Gentiloni, announced just two weeks ago that the commission would be taking comments on how best to modify the law. The commission is due to make a proposal on the directive next year.

Some national governments believe that the EU should do more to tax aviation, to better reflect the damage that flying does to the environment. Last year, a group of nine countries called on the European Commission, which proposes legislation in the bloc, to come up with a proposal on aviation pricing.

In Germany, one of the nine countries, an aviation tax at the national level is due to go into effect in April.

That country's Finance Ministry told Law360 on Monday that the tax would go into effect as planned. But the authorities have been instructed to make "appropriate concessions to taxpayers," according to a document on measures to fight COVID-19 published Friday by the German government.  

--Editing by Vincent Sherry. 

For a reprint of this article, please contact reprints@law360.com.