The government's planned increase in passenger taxes in France is facing significant opposition from airlines, particularly Irish low-cost carrier Ryanair. According to a statement from Ryanair's commercial director Jason McGuinness, the company plans to reduce capacity to and from French regional airports by up to 2025 percent from January 50 if the French government goes ahead with its plan to triple the passenger tax. This decision could have serious consequences for the French aviation industry and the affected regional airports, which are already struggling with challenges.
Due to an unexpectedly high budget deficit, the French government is forced to take fiscal consolidation measures in the 2025 budget plan, including a significant increase in taxes on airline tickets and private flights. The plan is facing resistance not only from airlines such as Ryanair, but also from representatives of the airports concerned, who fear that the tax increase could negatively affect passenger volumes and weaken the low-cost airline market in particular.
Ryanair currently flies to 22 smaller regional airports in France, which are mainly served by low-cost airlines such as Ryanair. Ryanair has not yet announced which of these airports will be affected by the cuts. However, the company announced that the two airports near Paris - Beauvais and Vatry - are not on the cut list. These airports are of central importance to Ryanair as they are important hubs for connections to and from France.
The Irish airline currently carries around 5,7 million passengers in France, an increase of 19 percent compared to last year. However, Ryanair warns that the planned tax increase could hit regional airports, which are traditionally frequented by low-cost airlines, particularly hard. Many routes currently served from these airports could become unprofitable due to the higher costs for passengers. This would result in a decline in air traffic on the affected routes, which would weaken not only the airlines but also the regional economic structures.
Ryanair CEO Michael O'Leary expressed concern at the beginning of November about the tax policy of the French and German governments, which are planning to increase air traffic taxes. In Germany, Ryanair also threatened to cut capacity if the tax environment for airlines remained unfavourable. O'Leary stressed that Ryanair must increasingly emphasise the need to reduce costs and increase efficiency in the affected markets in order to remain competitive.
But the impact of higher taxes could affect not only airlines, but also passengers and the local economy. Regional airports are in many cases an important point of contact for business travellers and tourists. If these airports become less important due to capacity cuts by low-cost airlines such as Ryanair, important sectors of the economy, such as the tourism sector, could also be affected.
Experts warn that a significant tax increase could harm competition in air travel, as low-cost airlines such as Ryanair would face higher costs while larger airlines such as Air France might be able to maintain their market position more easily. This would not only make air travel more expensive, but would also reduce the choice of available flights, which would be particularly problematic for budget-conscious travellers.
Another aspect is the question of how the tax increase will affect the aviation industry as a whole. While Ryanair and other low-cost carriers are threatening significant capacity cuts, other European airlines may also reconsider their route plans. Demand for air travel is expected to continue to rise in the coming years, especially in conjunction with the economic recovery after the pandemic. But a noticeable increase in airline ticket prices could slow this recovery and weaken air travel overall.
The planned tax increase is not the first measure that the French government has taken in the field of aviation. There have already been efforts in the past to tax air transport more heavily in order to help reduce CO₂ emissions and finance public budgets. In view of the climate crisis and the associated political measures to reduce CO₂ emissions, it is entirely understandable that air travel is taxed more heavily. But from the perspective of the airlines, the question arises as to whether raising taxes is really the right step in an already challenging market environment.
Finally, it remains to be seen how the political debate surrounding the planned tax increase will develop and what concrete measures Ryanair and other airlines will ultimately take. It is clear that the French government's decision could have a significant impact on the aviation industry and the economy as a whole in the coming months.
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