TAX NEWS - June 2010

German Airlines, Airports Fear Passenger Fall Due To New Tax

FRANKFURT -- German airlines and airports fear passenger figures will plummet due to the government's proposed aviation tax, the German airport working committee ADV and German Airline Association BDF said Thursday.

According to industry estimates, around five million passengers and 10,000 jobs will be lost, ADV and BDF said.

They pointed to the Netherlands, where such a tax was implemented in 2008 and cancelled again one year later after a stream of passengers started flying from neighboring countries, leaving the Dutch government missing out on about EUR1.3 billion in income.

The German government has said it intends to introduce a tax on air passengers, which is expected to contribute EUR1 billion a year to the government's package of austerity measures.