The Dutch government wants to add an air passenger tax to airline tickets starting in 2021. Will the Netherlands embrace a controversial scheme like the UK Air Passenger Duty?
The proposed plan will start modestly: €3.80 on flights within the EU and €22 on intercontinental flights.
The UK Air Passenger Duty also started modestly: £5 in Europe and £20 outside of Europe for economy class, and £10 within Europe and £40 for other destinations for premium economy class or higher. Today, flights over 2,000 miles are £75 in economy class and £150 in premium cabins.
The Dutch tax is intended to “make the aviation sector more sustainable” by using the raised money to invest in green-related initiatives.
Tried and Failed
This is not the first time the Netherlands has tried such a tax. In 2008, an €11.25 tax was levied on EU flights and €45 for all flights beyond. A year later, the tax was repealed. Unsurprisingly, with margins tight and airlines passing on the tax to consumers, many chose to fly out of nearby Germany or Belgium instead.
But think back to 2008…the year the Great Recession began. The Netherlands and the world are in a very different financial position a decade later.
EasyJet Opposed
As you might imagine, airlines are against such a tax. EasyJet has already taken a vocal and public stance against the proposed new tax.
Johan Lundgren, EasyJet’s CEO, said:
It’s painted as an environmental tax, but with no benefit to the environment. We are against it. It is not the way forward…We are engaging with the [Dutch] government on this.
CONCLUSION
I’m suspicious of taxes that begin modestly only to grow far faster than inflation. I don’t pretend to be a tax expert, but consumers will vote with their feet if tax burdens become too high. If the new aviation tax is levied, I hope the government will be able to demonstrate to the many visitors merely passing through Amsterdam each day what these added fees will be used for.
I personally avoid flying to the UK from long distance because of this. We typically stop in Ireland, Spain or elsewhere first and continue in and out of the UK on separate local tickets. For our family of three, spending a few extra hours in Dublin or Madrid means a reduction in cost of £420 round trip ($600).
I am in the same boat as Kyle, we avoid the UK when travelling to Europe. It may be merely coincidence, but I know the Dutch government is about to start rolling back a tax benefit that was available to expats in order shore up its finances…retroactively! And using the funds to make aviation more sustainable…not buying it. Likely going into the general bucket and lost forever.
The EU in general taxes it’s citizens enough!!Hope they take heed!!!
I’m not convinced an APD will have a meaningful effect on air traffic in this day and age. It may cause some people at the margins to change their behavior, but at the end of the day, when SkyTeam elite status is on the line, folks traveling overseas are still going to take that connection in AMS even if it costs an extra $100. And the Dutch government knows it.
The real problem I have is what Phil said – I have a bag of magic beans to sell anyone who believes the tax will actually be used “to make aviation more sustainable”. It’ll just be another pot of money used to plug budget deficits or fund whatever new social program comes along. It would be nice if the government were honest about it for a change.
Meh. If taxes really changed behavior, LHR would be a ghost town by now. I don’t object per se, but the problem is these fees always seem to end up funding silly pet projects and totally wasted.
LHR Tax changes our behavior and I am sure we would take any other newly imposed taxes into account.
I purposely avoid LHR because of the tax even though I have a boatload of Avios. There are too many good options to waste unnecessary $$$ on fees like this.
If you travel on award tickets yeah you notice it and avoid London but cash tickets? No one really notices.
And to think that the lack of APD is partly attributed to Amsterdam’s rapid growth in the last few years with passengers preferring to fly KLM out of AMS on long haul.