Low-cost airlines ‘unjustly favoured in new tax plan’, says Air France

Low-cost, non-French airlines such as Ryanair will be unfairly favoured over traditional French airlines as a result of new airport taxes, French flagship airline Air France has said.

The group issued a statement on September 28, saying that a planned higher tax on larger airports in France that operate long-haul flights would introduce “a new competitive disadvantage” and “hurt” French airlines.

The government is set to introduce extra taxes on “long-distance transport infrastructure”, including major airports and motorway concessions.

The levy will only apply to companies whose operating revenue exceeds €120 million per year with an average profit margin of over 10%. This means that it will not apply to many small airports, where many low-cost airlines operate.

Read more: French airport highlighted as vulnerable and too dependent on Ryanair

Read more: Mid-sized French airports ‘too reliant on cheap flights’, report finds

The new tax is expected to raise an extra €600 million a year for the government from 2024.

Before deciding on this tax the government had considered the possibility of adding taxes to airline tickets. Now, airport operator Aéroports de Paris said that it plans to gradually “pass on” the majority of this tax to airlines.

“This is not good news at all,” said Air France managing director and CEO Anne Rigail. She said that Air France already pays €3 billion a year in taxes and charges.

The flagship airline’s CEO said that the new tax “will distort competition between French airlines and foreign airlines such as Ryanair, which serve France [with short-haul flights] from airports such as Beauvais, and would not be affected by this tax”.

She added that air traffic trends over the past 15 years showed that French airlines had been “falling year on year” and that the new tax would amount to a “distortion of competition” which would hurt the companies further.

The group’s statement said it wanted to “sound the alarm” and “put a fair environment in place for the French airline sector and preserve competitiveness”.

“It seems logical to us that French companies should not have to pay the majority of French taxes alone,” said Ms Rigail.

Read also

Flight prices from France keep soaring. How can I find the best deals?

Why Americans are choosing Air France flights over US airlines

Air France, Lufthansa, Ryanair: Why discount flight tickets are over