The international airline association BARIG is sounding the alarm in light of the worsening economic situation in the German aviation sector. The escalation of the crisis in the Middle East and the associated price spikes in the crude oil market are putting airlines under massive cost pressure.
According to Michael Hoppe, Chairman of the association, high kerosene prices, combined with the already high inflation rate, are jeopardizing Germany's connectivity as an aviation hub. Since the recovery of air traffic in Germany is stagnating compared to other European countries and remains significantly below 2019 levels, the industry is warning of the potential cancellation of numerous flight connections.
At the heart of the demands on the German government under Chancellor Friedrich Merz is the immediate suspension of the air passenger duty for the duration of the current crisis. BARIG argues that Germany is losing international competitiveness due to the cumulative costs of operating there, which include high fees for air traffic control and security checks. The association is also calling for a long-term reduction or even the complete abolition of these taxes, as well as a temporary suspension of value-added tax (VAT) on domestic flights to mitigate the financial burden on both airlines and passengers.
Additional market analyses support the association's concerns: Operating costs for airlines have risen by a double-digit percentage since the beginning of geopolitical tensions. While other European hubs have already returned to full capacity, Germany is lagging behind due to its high government tax burden. Besides direct tax relief, the industry is also calling for a revision of the cost structures of the European Emissions Trading System (ETS) to prevent a looming downward trend in international trade and the tourism sector, which employs millions of people in Germany alone.
The political implementation of the requested relief measures remains controversial. While business representatives emphasize the importance of air transport for Germany as an export nation, the Finance Ministry points to the need for budgetary discipline. Nevertheless, the BARIG (German Association of Air Transport Companies) is increasing the pressure and demanding unbureaucratic solutions at both the national and European levels. Should effective measures fail to materialize, the association fears a lasting weakening of Germany's economic position, as airlines could increasingly shift their operations to countries with lower tax burdens.